Artificial intelligence is transforming the way we manage money by offering smart, fast, and more efficient ways to track your money, budget, save, and even invest. From AI-powered budgeting apps that track spending to robo-advisors that help automate investments, the fintech space is changing quickly
But can AI really help you save money? While these tools offer valuable insights and automation, they also come with limitations. Understanding how to use them effectively, without relying on them blindly, could help you shift your approach to money management.
How AI is changing the way we manage money
Some of the most practical applications of AI in your finances are using tools to help you analyze spending patterns and automate your savings. Some of these tools can even provide real-time tips, notifications, and warnings to help you reduce your bills, avoid wasteful spending, and help you understand where your hard-earned money is going.
Moka or KOHO are two examples of fintech companies offering such AI tools to their customers. KOHO VP, David Kormushoff, recently mentioned in an Amazon Web Services panel how the company was using AI tools to help prevent fraud and reduce fraud and money laundering investigation time.
Robo-advisors like Wealthsimple and Questwealth are also using algorithms to build and manage investment portfolios based on an individual’s risk tolerance and financial goals. These services offer a more hands-off approach to investing, often with lower fees than traditional financial advisors. AI-powered stock analysis tools can also scan market trends, helping investors make more informed decisions.
Beyond these financial tools, you can also leverage free AI models like OpenAI’s ChatGPT or Google Gemini to cut everyday costs. Whether it’s finding grocery deals, planning budget-friendly meals, or optimizing your commute for fuel efficiency, AI can provide personalized money-saving tips based on your budget and goals. Just outline what you need, ask for advice, and let AI help you spend smarter.
AI isn’t perfect, though. I’m not just referring to instances of bad actors using malicious AI programs for hacking, scamming, and extortion, either.
While AI tools can certainly provide helpful insights, they shouldn’t replace human judgment altogether. AI often lacks context and may not be able to fully understand your personal financial goals, emotional spending habits, or long-term planning strategies. That’s why it’s important to use AI as a tool, rather than as a substitute for true financial literacy.
Understanding the risks of AI
Over-reliance on AI can lead to financial blind spots, and the output is not perfect. It tends to make a lot of mistakes, still. They’re often not programmed to factor in complicating factors like sudden income changes, unexpected expenses, or long-term financial goals.
Another major concern is data privacy and security. Many AI-driven apps require access to your banking information, transaction history, and personal details. While reputable platforms use cutting-edge encryption and security protocols, storing sensitive financial data online always carries some level of risk.
It’s important to only use trusted applications, enable security measures like two-factor authentication, and be wary of what devices or networks you’re giving access to your sensitive accounts.
AI-driven financial recommendations can also be overly generalized. Robo-advisors, for example, rely on preset algorithms that may not fully align with your financial situation or risk tolerance. Unlike human financial advisors, automated investment tools can’t factor in the emotional or psychological aspects of money management.
Moving forward
As the technology continues to progress, we’ll likely see it implemented throughout society in ways that we may not even be able to detect. We could even see the advent of Artificial General Intelligence (AGI), which could hypothetically be capable of feeling and processing emotions similar to humans.
Ultimately, today’s AI programs can be powerful financial tools when used wisely. They shouldn’t replace personal responsibility, financial literacy, or strategic decision-making.
Personally, I would never take something that AI generates at face value for things that are very important, such as my money or health. It still makes too many mistakes. Always double-check AI-generated insights and, when in doubt, consult a financial professional who can help you put all of the pieces together.
