Elizabeth Ayura, Neldwallet
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While budgeting, debt management, and juggling investments for retirement may be overwhelming, artificial intelligence may be able to help with a balanced behavior. There are many AI-driven tools that can be used to manage your personal finances, such as chatbots, robo-advisors, apps, financial assistants, and search engines.
As the list of AI-driven tools continues to grow, you may be considering using them for your financial decisions. Perhaps you are already.
It is important to understand the risks and opportunities of using AI to manage your money.
DO: I want basic financial education
AI can be useful if you want to better understand financial topics, and Molly Nelson, a certified financial planner in Missoula, Montana, runs Money Coven, a financial community for women.
“When you’re looking for basic education, I think it’s a great tool you can use to clarify your own financial concepts and definitions of finance,” says Nelson.
Basic education includes budgeting, real estate planning, or insurance work.
Nelson adds that CHATGPT (AI tool that provides responses to input prompts) can be used for financial education. For example, you could ask multiple questions about financial topics you don’t understand and ask them to adapt their answers to your learning style or provide a practical example.
One of the benefits of chatbots is that they can participate in two-way conversations. In other words, chatbots can be soundboards or thought partners for use with other resources such as financial experts, books, review content created by financial platforms.
Even if you are using AI tools just for general education, please check the information you are obtaining.
Don’t: Seek investment advice
Most people can agree that investments can probably be intimidating. For this reason, using AI tools for advice such as best-performing stocks to invest in and best-purpose cryptocurrency to buy may be appealing. But that’s probably not the best idea, Nelson says.
She says she should be generous with using AI for investment advice. This may be especially true if you are not familiar with forming prompts, which is the question you ask the bot.
The prompts you use may affect the quality of the answers you receive. The more specific and descriptive the prompt, the better your answer will be.
“They don’t intend to take into consideration any other assets, financial impacts, or meanings of a person related to debt payments or income. That’s where talking to real people can be most useful,” says Nelson.
Since Robo-Advisors helps invest and use AI, you may wonder if Robo-Advisors is an exception to the rules. Answer: It depends.
Robo-Advisors are often much lower than human financial advisors and can be a good option for some as they can quickly put together an investment portfolio based on answers to questions. However, Robo-Advisors doesn’t take into account your entire financial picture and will not provide personalized financial advice just like human advisors.
DO: Get help with budgeting
Budgeting can take time, especially if you haven’t yet established a system that suits you. AI can help automate some of the boring aspects of budgeting, such as sorting through transactions, says Anthony Dimaggio, co-founder of Candlestick AI, New York’s AI-powered investment platform.
“AI can use it to automate that process and sift that information,” says Dimaggio. “So it reduces the effort that has been output on your side and still gets the same results, helping you manage that budget, look at your finances, do better.”
There are multiple tools that use AI to help your budgeting needs. For example, CLEO is an AI budget app that can provide budget plans, send payment reminders, and track your spending. Some popular budget apps have also started to incorporate AI through chatbots, for example, making the tools more efficient.
App aside, AI chatbots can be useful when it comes to budgeting factors, such as analyzing spending habits, identifying areas for improvement, and providing recommendations. Keep the latter in mind, considering that AI tools may be better at providing quantitative data than qualitative data, Nelson says. Qualitative data is an important part of budgeting, as it captures personal values and takes into account triggers, she adds.
“If someone just passes the budget over to AI without knowing that person, it could just cut certain costs that are truly unnegotiable for them,” says Nelson.
Don’t: There are unrealistic expectations
If you are a practical investor, AI may help you save time when researching and analyzing your assets. However, you will still want to check the information given before taking any action.
The bottom line means that AI can be a partner that can help you manage some aspects of your finances, but it won’t be able to provide you with the level of personalization you need to help you achieve your goals.
Elizabeth Ayura writes for Nald Wallet. Email: eayoola@nerdwallet.com.
The article, “Using AI to Manage Finances,” originally appeared in Nerdwallet.
Original issue: March 12, 2025, 2:39pm EDT
