Should You Let AI Give You Financial Advice?

When AI first came on the scene, many were skeptical. It was great for a simple task like organizing your grocery list, but struggled with more complex questions. As the years have gone by, though, AI usage has grown and its abilities are getting better every single day. A recent study by the Pew Research Center says that 62% of U.S. adults interact with AI at least several times a week.

Although views on AI usage vary, the numbers show that we are relying on it more. AI bots can get to know us as we utilize them more. Many questions seem harmless, such as “What sides would pair well with a steak?” But other, more personal information can be given as we use and trust it more. Suddenly, we’ve gone from asking dinner questions to asking it if it thinks you have enough in savings to buy a car in the next few months.

Here’s where it can get tricky. It’s great to use AI to help simplify your life or ask questions you don’t know the answers to. But giving an AI tool too much personal information can put your online security at risk. Some AI tools may store conversations or other information you provide, depending on the service and its settings. The more personal information you share, the more important it is to understand how that information is being handled and protected.

There are things that you should never tell an AI and other things it can help you with generally. Let’s discuss some positive ways that AI can support your day-to-day life, then we’ll talk about information you should never give your chatbot.

Budgeting is a hot topic for everyone, and sometimes it can be hard to know where to start with a budget. AI could be a great tool to help you organize your thoughts and put together an idea for starting your monthly budget. It can even suggest categories or questions you might not have considered. The key here is that AI is helping you organize your thoughts, not looking at your actual bank account.

AI can also help explain financial terminology. You can ask it things like, “What does APY mean?” “What is the difference between fixed and variable interest rates?” or “What are the benefits of opening a certificate?” There is nothing wrong with asking questions about money. It could even help you create a list of questions or organize information you’ve already gathered.

For example, you can ask what you should compare when looking at two auto loans. Let it help you generate a checklist of things to look at. AI should never be the thing that tells you what loan to take or what you can comfortably afford! It can help you organize your thoughts and understand terms that you might not know already. The right financial decisions for yourself should always be made by you, with guidance from your financial institution and other trusted sources.

This is where you should start to look at what AI should not be doing for you. It’s important to remember that even though AI seems very smart, it doesn’t know your whole financial picture, and it should never know it either. It has no idea what your goals are, what other obligations you have, what changes may be happening in your circumstances or what your complete financial situation looks like.

Instead of asking, “Should I take this loan?” a better question would be, “What factors should I consider when deciding if a loan fits my situation?”

Financial institutions, financial professionals and other qualified sources can provide information specific to your situation.

It’s also very important to keep your financial information private. Never give an AI chatbot account numbers, debit or credit card numbers, Social Security numbers, passwords, PINs, online banking login information, security questions and answers, or copies of sensitive financial documents containing personal information. There is never a good reason to give an AI tool this information.

Rather than asking an AI chatbot, “Here is my credit card number. Can you tell me whether this charge is legitimate?” ask, “I don’t recognize a charge on my credit card. What steps should I take to investigate it?”

Remember, AI can be wrong! It can provide outdated information, misunderstand a question, make an incorrect calculation or give an incorrect answer. Never rely on AI information as the absolute truth. Always fact-check it and use your own financial understanding as the first line of defense. Before making a financial decision based on something AI tells you, take a moment to verify the information with a trusted source, like your financial institution, the actual lender or card issuer, or another qualified source.

Before you type in your financial question stop and ask yourself:

1. Does this question require personal information? If yes, remove it.
2. Am I asking AI to explain something or make a decision for me? Explanation is a better use.
3. Will this answer affect my financial well-being? If yes, verify it outside of AI before acting.

AI can be a useful tool for understanding and organizing your finances, but it doesn’t replace your judgment or the guidance of people who know your financial situation. The next time you turn to AI with a money question, think of it as a starting point rather than the final answer. And when it comes to your personal financial information, keep it private.

Information provided is for educational purposes only and is not intended as
financial, legal, or tax advice.