Let Al Analyse, And Expert Advise

AI can give you brutally honest answers related to your money based on facts. But our money decisions are also based on emotions which Al does not seem to understand

- By LARISSA FERNAND, Behavioural Finance Expert

I was reading about a woman in the US who began to panic at the fact that she had zilch savings even though she was in her 30s. She was earning rather well and had no dependents. She had only one credit card which she used extensively, but always ensured that she cleared it at the end of every billing cycle. By doing so, she avoided debt on the card. Clearly, a lot was in her favour—her circumstances and her behaviour. So why were her savings nonexistent?

She approached a financial advisor to help figure it out. He told her that the only thing she needed to do was to figure out where her money was going, and after she got that information, they would take it further.

She sought the help of ChatGPT. I have no idea how she exported the data set of her expenses to ChatGPT. However, her prompts were explicit. For instance, one of the prompts was: “Column B is the name of the vendor. Group all expenses by vendor and show me which ones I spent the most money with.” She also got the data sorted according to spending categories.

What showed up was the horrendous amount spent on body care, makeup, and trips to the salon and spa. She went back to the advisor who had a long chat with her. She confessed that she was body shamed a lot when growing up, and it was her weak point. These expenditures were necessary to boost her confidence and make her feel that she was looking good all the time. She just never realised how much her insecurities were costing her monetarily.

It is evident that artificial intelligence (AI), particularly Generative AI (GenAI), has become the lynchpin of transformative change in money management. However, let me quickly add that I am not blindly endorsing for you to deploy AI to understand your finances. In fact, it is a reminder that it cannot be used in exclusion to other avenues.