There are fewer topics people like to avoid more than personal finance. We get uncomfortable talking about money for all kinds of reasons. It could be because we’re embarrassed to be in debt or because we don’t want to make people feel bad for how much money we make.
AI has the potential to empower people to become more knowledgeable and in control of their personal finances. I see this happening in two ways — by trading on the stock market and through using AI-enabled personal finance apps.
Artificial Intelligence & the Stock Market
I work primarily in the field of finance and have developed an AI that is used to make stock market recommendations. In my experience, this type of AI is something that we are now using almost every day. Before you get too excited thinking about how you’re about to cash in on the stock market, remember that AI only works in terms of probability. Nothing is a sure thing, and you can never engage with the stock market without incurring some element of risk. However, by using AI, we can make smarter decisions about which stocks to buy and when to sell them.
AI isn’t limited to only serving those of us who are already working in finance-related fields. Anyone who is interested in becoming an investor has the opportunity to use AI now and will continue to in the future. The AI can quantify how a company is performing based on its performance and tell us whether or not it’s a good investment. From there, you can make the decision about what to buy, when to buy it, and when to sell it.
The result of using AI can help investors, large and small become better at investing their money. AI can help people save money by preventing them from buying stocks that are a poor investments. It can also help people make money by recommending stocks that have a high probability of being a good investment.
Save More, Spend Less with an Artificial Intelligence-Powered Personal Finance App
Outside of the stock market, AI can give you recommendations for how to save and invest your money based on your existing spending and saving habits. If you search in the App Store, you’ll find a dozen or more AI-powered personal finance apps designed to help you figure out the best ways to use your money.
These apps can solve a problem facing at least 20 percent of Americans, which is figuring out how to add to a savings account[liv]. We all have blind spots when it comes to spending money. Unless you meticulously track your spending, you likely can’t say exactly where your paycheck went this month. You have some idea, sure, but how much did you really spend shopping on Amazon compared with how much you think you spent?
If you hate the thought of facing your personal financial accounts, you aren’t alone. Fortunately, you can enlist the help of an AI to help you get real with your bank account.
These apps use your existing financial data, including banking and credit information, to keep track of the things you probably ignore. For example, a lot of people underestimate just how much money they spend going out to eat or getting take out. An AI-powered app will keep track for you and let you know when you are getting close to maxing out your monthly dining out budget.
AI-powered finance apps can also monitor your credit and help you improve your credit card habits to get a higher credit score. If you have a goal, such as getting a particular score so you can get a better interest rate on your mortgage, your app can monitor your progress and give you advice so you can hit your target.
A lot of people avoid talking about money because they find it stressful or even embarrassing, especially if they are in debt or can’t seem to figure out how to add to their savings. Many apps let you chat with an AI about your personal finance goals and challenges. This can help you talk through your financial situation without feeling embarrassed.
It’s empowering to take control of your personal finances! One word of caution, though. If you use an AI finance app, make sure it’s legitimate. You’ll be giving it access to all of your financial information, so you want to make sure that it doesn’t end up in the wrong hands. Your app should be encrypted, and the company should disclose that they will never sell your personal information to third parties.