AI Chatbots in Personal Finance: Potential and Pitfalls

Relying on AI for money advice? What financial experts think of chatbots' responses

Four San Diego teens beat the nation in the 2025 National Personal Finance Challenge with YouTube and AI as their teachers. Could you match them? From grocery lists to help creating a website to promote her work as a realtor, Jennifer Allen says she uses ChatGPT for everything. When unexpected hospital bills and time away from work after giving birth led her to rely on credit cards, she knew her debt was growing. But she was scared to tally the total amount and rarely looked at her bank accounts. Until one day, she wondered if ChatGPT, or "Chat," as she calls it, could help. She fed the chatbot required information and it told her she had amassed $23,000 in debt. Surprised by the number, she wondered how she could pay it off. Allen said she didn't even think about consulting a financial planner. She did, however, ask ChatGPT. "Even if a financial planner told me something, I would still go to Chat to run it by them," Allen told USA TODAY. She prompted the chatbot to give her one thing she could do every day to help pay down her debt, and documented the process on TikTok. By the end of two 30-day challenges, she'd come up with $13,078 by following the bot's advice and earned additional money from the TikTok Creator Rewards Program. She said she now has a little less than $5,000 in debt remaining. While not everyone follows ChatGPT's advice every day, the chatbot has experienced rapid growth. It's reaching about 700 million users weekly - four times more than last year, according to OpenAI's Nick Turley. ChatGPT isn't the only artificial intelligence model people are relying on for information. A Morning Consult survey found more than half of U.S. adults said they refer to AI-generated summaries when searching online and 1 in 10 said they don't consult other sources. A Southeastern Oklahoma State University questionnaire found that 1 in 3 Americans have used an AI tool to make a career decision. Some think the technology will transform the financial planning space. Others warn against relying on it for money advice. And while some humans may be self-interested when saying they do a better job than AI, even companies behind popular chatbots advise caution. Large language models, like Gemini, can "hallucinate" and present inaccurate information as factual, according to Google. USA TODAY asked five popular chatbots common personal finance questions. Here's what they said and what financial experts thought of their responses: AI's advice on retirement savings USA TODAY asked ChatGPT, Claude, Copilot, Gemini, and Grok three personal finance questions in the same order - starting with one of the most common: How much money do I need to retire? Their answers were similar but not identical. In seconds, the chatbots generated somewhat lengthy responses, usually formatted in bullet points, giving examples and general advice with caveats. Grok was the only model to give a specific number in its final answer - about $1 million. But it, alongside ChatGPT and Copilot, also asked the user to provide more information. Gemini recommended using a retirement calculator and Claude suggested meeting with a financial planner. All pointed to the 4% rule -- a withdrawal strategy that says retirees can safely withdraw 4% of their savings during the year they retire and then adjust for inflation each subsequent year. However, the rule is more than 30 years old and its creator said it was outdated in 2022. "There is not one number for everybody. If the chatbot tries to answer this question without asking for information, that's useless," said Annamaria Lusardi, who heads Stanford's Initiative for Financial Decision-Making. "The 4% rule of thumb is completely outdated... If you follow it, you have a very high probability of running out." AI's advice on credit scores The chatbots' responses to the question "How do I improve my credit score?" were nearly identical. They suggested stategies like paying bills on time, keeping credit utilization low, and maintaining a healthy mix of credit. "This is a much easier question for ChatGPT to answer correctly because there is all of this information, for example, on the FICO score website," Lusardi said. "If you compare these two questions, this is really a type of situation where you can have rules for everyone." Greg Clement is the CEO and Founder of Freedomology, a technology and coaching company that launched its own chatbot dedicated to helping people with their finances, health, and relationships. He worked as a financial planner for eight years and thinks popular AI models can be useful when people have financial questions but that their answers are still "very vague and generic." "It's almost as if you're talking to 100 financial planners and you ask the same question to 100 people and you try to consolidate all of their answers into one summary," Clement said. Between AI's documented bias and inabilty to understand things on a human level, Tori Dunlap, a money expert who founded Her First 100k, is skeptical of people relying on the technology. "It's there as your digital robotic personal assistant. It's not meant to challenge you or push back, or help you think differently. That's something a coach or expert can you help you do," Dunlap said. "I would also say though, if you're going to go from no financial advice to ChatGPT, I will take ChatGPT every time." What happens when you give AI specific numbers? Using the median household income and down payment in Illinois, USA TODAY asked the chatbots what home price a couple could afford in that state. Before giving a number, most asked the user to consider factors including their debt-to-income ratio, private mortgage insurance, and property taxes. But without asking for more information, each gave a different range. ChatGPT and Gemini were the most optimistic, suggesting $300,000 to $320,000 and $275,00 to $325,000, respectively. Claude said $245,000 to $270,000 and Copilot said $225,000 to $250,000. Grok gave the lowest range from $200,000 to $240,000. "Personal finance is about our life. I don't know that I would leave it to just artificial intelligence without a careful check and being aware that different ones will give me different results," Lusardi said. "Some of these suggestions can be very simple and potentially not very useful." Dunlap said the chatbots' variety of answers is the result of them not having enough information. If someone asked her this question, she said she'd follow up by asking about their credit score, their ideal mortgage payment, and interest rates. "But before we even do that, my question is: Do you actually want to be a homeowner or do you just feel like you need to in order to be successful?" she said. "By definition, you're talking to a robot. You're not talking to somebody who understands real complex human emotion." After all, if someone asks AI this question, they're talking to a chatbot who has never experienced homeownership. "If a young couple in the Freedomology community would ask the same question, they'd probably get answers from people that have owned a house for 10 or 20 years," Clement said. "How do you replace that? I don't think you can." What do AI companies recommend? In USA TODAY's chats with the AI models, several included disclaimers that they were not financial advisers, and AI companies have some safeguards in place to fact check their responses. Google's double-check feature highlights any information that is contradicted online. The company's help center notes that people should not rely on Gemini for financial advice. A spokesperson for Anthropic, the company behind Claude, said they are encouraged to see people using the model as a financial literacy tool to demystify topics like compound interest and credit scores. However, they said while Claude can help people become more informed, it should not replace licensed professionals for personalized financial decisions. They recommend using Claude to learn and prepare smarter questions, but to rely on certified professionals who can give personalized advice when it comes to actual investment decisions and retirement strategies. "The most successful approach we see is people using Claude to level up their financial literacy, then taking that knowledge into real-world decisions," the Anthropic spokesperson said in a statement to USA TODAY. "They understand the terminology, recognize better opportunities, and feel more confident, whether they're negotiating a car loan, choosing between job offers, or preparing for retirement planning meetings. That's where AI genuinely helps -- making financial knowledge accessible to everyone." In another statement to USA TODAY, a spokesperson for Microsoft said Copilot's Deep Research mode can help people make well-informed choices in areas that require careful evaluation, including financial decisions. "As we look ahead, we're focused on making Copilot an even better AI companion; one that's more personal and feels natural being used in everyday life," the spokesperson said. "AI can still make mistakes, so we always recommend people check sources and reach out to a financial adviser if needed." While Allen said she doesn't take everything AI says at face value, she credits it as a reason she went from not knowing how much debt she had, to paying a majority of it off. "That's what changed about this whole process," Allen said. "I'm not afraid. I have ChatGPT on my side." OpenAI and xAI did not respond to USA TODAY's requests for comment.

Can ChatGPT help you get out of debt? What experts and users say about AI chatbots' financial advice

AI chatbot for financial advice: Artificial intelligence tools such as OpenAI's ChatGPT have become a go-to resource for individuals who need assistance with personal finances, as per a report. From managing budgets to retirement planning, many are looking to AI to provide guidance, however, while AI can provide speedy solutions, experts warn that it cannot substitute for personalised assistance from financial planners, according to a USA Today report. One person who has found real value in AI's support is Jennifer Allen, a realtor who depends on ChatGPT for, among other things, overseeing grocery lists and creating a website for her practice, as per the report. When unexpected hospital bills and time away from work after giving birth led her to depend on credit cards, Allen's debt quietly grew and she was scared to tally the total amount, as reported by USA Today. However, one day, she thought of asking ChatGPT to help, and then fed the AI chatbot the required information and it told her she had amassed $23,000 in debt, according to the report. Allen was shocked by the number, and did not know how she could pay it off and said that she didn't even consider consulting a financial planner, however, she ended up asking ChatGPT, as per the USA Today report. Allen revealed that, "Even if a financial planner told me something, I would still go to Chat to run it by them," as quoted in the USA Today report. She then asked ChatGPT how she could pay it off, and the AI provided her with a single small task to do each day, which Allen did and also documenting her progress in two 30-day challenges on the social media platform TikTok, according to the report. By taking ChatGPT's suggestion and leveraging the Creator Rewards Program on TikTok, Allen was able to raise $13,078, reducing her debt to almost $5,000, as per the USA Today report. ALSO READ: Trump backs away from Russia-Ukraine peace talks, sources say -- what's really behind the sudden pause? ChatGPT is not the only AI platform humans are using to answer their queries, according to the report. A Morning Consult survey discovered that over half of American adults look to AI-generated summaries when they are searching online, and one out of ten are reliant on AI alone and don't check other places, as per the USA Today report. Another study by Southeastern Oklahoma State University found that 1 in 3 Americans have used an AI tool to make a career decision, according to the report. OpenAI's Nick Turley said that ChatGPT has rapidly grown, reaching about 700 million users weekly, which is four times more than last year, as reported by USA Today. ALSO READ: Trump demands release of ex-Colorado clerk Tina Peters jailed for election breach -- warns of harsh measures While some people believe AI could completely change how we approach financial planning, making advice more accessible to everyone, as per the USA Today report. But others caution against putting too much trust in these tools when it comes to managing money and even the companies behind popular chatbots urge users to be careful, according to the report. Google warned that large language models, like Gemini, can "hallucinate" and present inaccurate information as factual, and the tech company's help center highlighted that people should not rely on Gemini for financial advice, as per the USA Today report. While a spokesperson for Anthropic, maker of Claude, explained that while Claude can help people become more informed, it should not replace licensed professionals for personalized financial decisions, according to the report. The Anthropic spokesperson said, "The most successful approach we see is people using Claude to level up their financial literacy, then taking that knowledge into real-world decisions," as quoted in the USA Today report. Even a spokesperson for Microsoft said about tools like Copilot that "AI can still make mistakes, so we always recommend people check sources and reach out to a financial adviser if needed," as quoted in the report. ALSO READ: Shocking twist: Computer Science grads face one of the highest unemployment rates today A money expert who founded Her First 100k, Tori Dunlap pointed out that AI chatbotsare "There as your digital robotic personal assistant. It's not meant to challenge you or push back, or help you think differently. That's something a coach or expert can you help you do," adding, "I would also say though, if you're going to go from no financial advice to ChatGPT, I will take ChatGPT every time," as quoted by USA Today. Can AI replace a human financial planner? No, AI can't fully replace the personalised and emotional understanding a human advisor provides, as per the USA Today report. Should I use AI for my finances? No, use AI as a helping tool, but always consult professionals for personalised advice, as per the USA Today report.