It’s a common discussion point, automating pots to help us get better control over our accounts. But how will it work? This is where this topic comes in.
What part of pots are to be automated?
I’d expect to see an option in each pot to identify if we would like to automatically top up the pot, and by how much. For instance, if we want to ensure that a pot gets £50 in it as soon as we get paid, we will select the option to automatically top up the pot and see two fields open up. The first is a slider for the amount and the second is a drop down for the regular inbound payment selection.
This will be very useful for preallocating funds via pots. Rather than a day to take the money, do it as funds arrive in the account. This way, our accounts are always correct, not on a certain day after we get paid.
So the next part of automating pots is when the money is used. This is the most often discussed and requested topic.
I ask two questions here, as there are different options from what I see.
Firstly, are you hoping to put all payments in one big pot, or are you happy to have a pot grouping scheme.
Secondly, do you want the option to lock out your preallocation pots. This will mean you can effectively freeze a pot, only allowing funds to be used by the automated process associated with it. So if you have a rent pot, you can freeze it to stop yourself (easily) withdrawing funds from it. Whereas if you have a magazine subscription pot you can leave that open as you don’t lose out dramatically if your payment is delayed.
Linking in pots as outlined earlier, we would be able to manage our Direct Debits when created to pre allocate the payment. This might create a new pot or allow us to select an existing pot.
If creating a new pot, we will select an amount we expect it to be - for instance, we might know that our TV license will be £10.80 per month. If the spinner to select the payment amount is in multiples of £5 then we select £15 or £10 against the PreAllocation of the Direct Debit. When the amount is first collected, it is £10.80. When the second amount is collected at £10.80 the pot is automatically updated to expect the payment amounts to be £10.80 and the next pre-allocation is adjusted accordingly. This has the added benefit of when the amount changes, as it sometimes does, we can be notified that the collected amount has been different to previous amounts. Do we want to acknowledge the change (update the pot preallocation), challenge the change (send us more information for us to go back to the DD requestor) or leave it as a one-off change.
Initially I would expect that a Pooled Pot would be manually updated. So we would not get the option to automatically pre-allocate funds based on each DD and SO. We would need to create the pot to put aide, say, £900 for bills and outgoings. When new payments are allocated to that pot it would make sense if we are notified that the pot currently pre-allocates x amount, either it will or wont cover the additional payment amount.
I get the feeling that most people on here would prefer to have one big pot for outgoings, rather than many little pots each linked to a payment. But the latter could be easier to implement than the former. The issue here is that many pots generate noise, so this might open up the option to group these pots.
For instance, we can have the options to display our pots grouped. So we would see “Cash Pot” and “Holiday Fund” and “Bills and Expenses”. The first 2 are actual pots, the last is a group of pots including the Direct Debit to BT, the standing order for paying Steve for that thing, and the Groceries Pot etc. To see those pots in detail, we have to step into that Group.
By being able to group or tag pots and assign rules to the grouping, we can even have more granular control over our pots. For instance, a set of “Important” pots like the core bills (Rent, Council Tax, Electricity) where we can’t dip into them without having to do some extra steps and have warnings etc, and “Trivial” pots where we can dip into them, but are warned x payment will be taken from there on y date and we will need to find more funds or the payment won’t go out.
Potentially, this could tie in with Overdrafts. An Important pot will automatically be paid, even if we haven’t got the funds in there, but will then incur overdraft fees until its repaid. With an automated function to take the overpayment + regular amount on our next payday. This might be true even if there is money in the account not pre-allocated. Not entirely sure how popular that may be, as we will potentially be charged overdraft even though we have money in the account. The key bit here would be that payments linked to a non-important pot will be refused if the funds aren’t there, but important pots are paid and we are shouted at by the app.
For instance, if you spend £20 from your balance of £49 but your Core Bills are overdrawn by £40 we can be notified that we didn’t really have that money available and will now be charged for being £11 overdrawn despite our account balance reading £29.
This is obviously a lot more advanced, the technical aspects of the more basic Pot Management will be the first step. But once that has been established, these latter ideas should be easier to follow.
So, how would you like to see pot automation work? Did I cover everything you would like to see, or can you think of improvements to this? It’s all academic as we aren’t the one’s doing the programming, but your comments might help the big guns identify how best to proceed.