Many turn to ChatGPT for solutions to their money problems

When Ms Myra Donohue's father, who is a financial planner, offered to help her with her finances, she politely declined.

- Kailyn Rhone

With a background in accounting, she did not want anyone else's help managing her US$5,000 (S$6,400) of credit card debt, not to mention car payments and other bills. But once Ms Donohue, 28, sat down with her finances, she realised how overwhelming the process would be, especially with two young sons and her partner recently laid off from his electrician job.

She found a way to approach it in a Facebook post about how to tackle your finances in seven steps. Step one was simple: List your income and fixed expenses and create a zero-based budget, a method that assigns a specific job to every dollar earned. Remembering how quick ChatGPT had been when she tried using it for other tasks, she decided to plug her numbers into the artificial intelligence (AI) chatbot and ask it to create a personalised financial plan.

Ms Donohue said she was not surprised by the advice the chatbot offered, but she was pleased by how quickly - within seconds - it generated a tailored budget for her.

AI chatbots have taken on many roles, including therapist, career coach, even romantic partner or friend. As more than half of Americans manage their finances on their own, many are turning to chatbots like OpenAI's ChatGPT and Google's Gemini for help tackling debt, finding better ways to save or figuring out how to invest in the stock market.

Two-thirds of adults who have used generative AI (Gen AI) said they had used it for financial advice, and around 80 per cent of those who acted on that advice said it had improved their financial situation, according to a recent survey of more than 1,000 people by Intuit Credit Karma.

But financial advice served up by chatbots should be handled with caution. The Credit Karma survey found that more than half of the Americans who acted on the financial advice offered by Gen AI said they had made a poor financial decision or a mistake in trying to follow the guidance.