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Adoption of artificial intelligence (AI) is growing every day: consumers and businesses utilizing AI for various purposes. There are many AI-driven tools that can be used to manage personal finances such as chatbots, robo-advisors, apps, financial assistants, and search engines. But should you trust AI to manage your finances? It's important to understand the risks and opportunities of using AI to manage your money.
AI can be useful for learning the basics and understanding specific financial topics. Basic information may include understanding how budgeting or credit cards work. When diving into specifics, it's a great tool to use to clarify financial concepts or financial definitions for yourself. You could ask multiple questions about financial topics you do not understand and ask AI to adapt those answers to your learning style or provide real-life examples.
Some AI tools are better at particular tasks, while the others are good at other tasks. In any case, try not to trust them completely, as they can produce inaccurate and misleading information. Even if you are using AI just for general education, cross-check any information you are getting with other sources. Limit AI usage to helping with tasks where you can check over the work and provide timely feedback, such as building a household budget.
Even if you are using AI tools for simple tasks, like analyzing spending habits, identifying areas for improvement and providing recommendations, they are still limited to what you tell them. Only you know your life, spending habits or triggers, and money values. For example, AI tools may slash certain non-negotiable expenses.
Another important thing when using AI tools is to always be concerned about your privacy and the security of your financial and personal information. Many financial experts recommend against sharing financial documents, such as bank statements, pay slips, and tax returns with AI. Always assume that whatever you feed to the AI tool, at the very least, is going to be used to train those tools. In a worst-case scenario, that information can be shared with other entities for different purposes, which could range from data brokers to advertising companies and everything in between.
AI can be useful for looking for information, setting goals, and managing some aspects of your finances, but it's still far from providing personalization needed to help you reach your goals.
