Autopiloting finances? Don’t just lose track

As you sleep happily at 30,000 feet above the ground, your pilot too may be relaxing — for at that height not only the route is defined, the aircraft can be safely put on autopilot without much intervention. But to bring the aircraft to that level, the pilot would have made some efforts initially.

As you sleep happily at 30,000 feet above the ground, your pilot too may be relaxing — for at that height not only the route is defined, the aircraft can be safely put on autopilot without much intervention. But to bring the aircraft to that level, the pilot would have made some efforts initially.
Similarly, put in some efforts initially, chart out a rough course and you will be able to put your basic financial life, at least as far as payments and investments go, on autopilot without much intervention.
However, just as the pilot needs to keep an eye around to ensure he
doesn’t head to a disaster, you cannot forget about automated payments
completely.

HT Image

How to automate
Utility bills: These can be paid online but there are two ways to do it. Either you go online every time you receive the bill and pay individual bills or authorise the bill aggregators to present bills each month to the bank you have a savings account with. The bank just needs a one-time authorisation from you to execute monthly transactions.

These bill aggregators approach the biller, such as mobile telephone companies or electricity provider, with your details and ask them for your bill every month. “We are the interface between the bank and the billers,” says Ajay Kaushal, director and co-founder, BillDesk, a payment company.
Similarly, payment for credit cards can be routed through your savings bank account.

Monthly investments: For your systematic investment plans, you can either give post-dated cheques, or enter through electronic clearing service or online platforms. Even for recurring deposits and others, you can give standing instructions to your bank.

What to keep an eye on
Losing track: The biggest danger of putting your investments and payments on autopilot is losing track. You may forget looking at the bills at all and errors may go unchecked. So you may overpay and won't even know that you have paid extra.

Wrong transactions: You spot an error in your bill but before you could act, the money got deducted from your account. There are cases of inflated bills, which could affect your budget.
Though the overcharged money is usually adjusted the next bill, it may take a few calls and a bit of running around before it actually gets done.

Authenticity: The government has put a framework in place to make these transactions secure. “Anyone handling third-party data is mandated under the law to take utmost care,” says Pavan Duggal, a Delhi-based cyber law expert. “However, customers should check the credentials of the service provider. As per law, they should be ISO: 27001 certified, a global standard on personal data security.”

What you should do?
Make a list of automatic deductions and check them regularly. Also, before ticking them off the bank statement, check individual bills for errors. Ensure the bills are paid on time to avoid disconnection of services. You can put a limit to the amount to be debited from your account, especially for utility bills.