AI aids budgeting but not personalized financial advice

AI tools can assist with managing finances, but they are not always the best source for personalized advice. There are many ways these tools can help, such as chatbots, robo-advisors, apps, and search engines. However, it's important to know both the benefits and risks of using them. Using AI for basic financial education can be beneficial. Certified financial planner Molly Nelson suggests AI can clarify financial concepts and definitions. For example, you can ask AI tools questions about budgeting or insurance. They can serve as a sounding board alongside other resources, like professional advisors or financial books. However, it’s crucial to verify the information you receive. Avoid seeking specific investment advice from AI. While tempting, the responses may be too general and not suited to your financial situation. Nelson warns that AI might not consider your assets or debts, which is why consulting a human advisor is often more effective. Robo-advisors may offer some help, but they also lack the personalized touch that can tailor advice to your entire financial picture. AI can also help with budgeting. It can automate tasks like sorting transactions, making budgeting less time-consuming. Apps, such as Cleo, can create budget plans and track spending. AI chatbots can analyze spending habits and suggest improvements, but they may not consider personal values, which are vital in budgeting. Lastly, it’s important to have realistic expectations with AI. While it can save time in research and analysis, double-checking information is still necessary before making financial moves. Overall, AI can be a helpful tool, but it may not replace the personalized guidance needed to meet individual financial goals.