Artificial intelligence (AI) is rapidly becoming a go-to resource for financial planning. A recent poll from Ipsos, a global leader in market research, reveals that almost 40% of Americans use AI to manage their finances. While some are all for embracing AI and letting it help in the whirlwind of everyday life, there are also downsides to be aware of.
Don't Miss:
Are you rich? Here's what Americans think you need to be considered wealthy. Can you guess how many retire with a $5,000,000 nest egg? - How does it compare to the average?
First, let's breakdown how Americans use AI for personal finance. According to Ipsos:
49% of Americans who use AI for finances use it to educate themselves more about personal finance 48% use it to update or create household budgets 47% use it to identify new investment strategies 47% use it to help build savings 46% use it to create or update financial plans
Trending: The average American couple has saved this much money for retirement -- How do you compare?
While most people don't believe that AI can understand the emotional influence of financial planning, the majority do think that AI can guide more informed decisions and make financial planning more accessible.
Of those who use AI for finances, there does seem to be some generational division. Gen Z had the largest group of respondents (61%) who use AI to assist in financial management. Older generations are less inclined to trust AI with their finances.
So, this begs the question: should you trust AI to help manage your finances?
See Also: Don't miss out on the next Nvidia - you can invest in the future of AI for only $10.
AI-powered tools and apps can provide some advantages when it comes to finance. They can analyze your spending habits, automatically categorize transactions, track expenses in real time and offer notifications to keep you accountable to your budget. Many AI algorithms provide personalized guidance for your spending habits and financial goals.
On the investment side of things, AI-driven investment platforms are gaining more traction because they can make customized recommendations based on your risk tolerance, financial goals, and market trends.
That being said, AI is not without its challenges. When considering utilizing AI systems for personal finance, knowing how they manage your financial data is important. Robust security is extremely important to protect your data from security breaches and unauthorized access.
Trending: Don't miss the real AI boom - here's how to use just $10 to invest in high growth private tech companies.
Another thing to consider is that AI isn't perfect. It may make fewer clerical errors than people, but it needs enough information to make the best suggestions. So, it's essential to provide the most accurate information possible. Also, AI can't account for the emotional rationale behind certain financial decisions, so it won't be able to perfectly tailor certain suggestions to your unique situation.
While AI is a powerful tool for managing your finances, it's not a one-size-fits-all solution. It's great for quick insights and general advice, but when it comes to understanding the full picture - especially the emotional aspects - there's no substitute for a human advisor.
If you're serious about your financial future, the smartest approach might be using AI to complement traditional financial advice. By combining both strengths, you can get the best of both worlds: the precision of AI and the empathy and experience of a human financial advisor.
Read Next:
When today's AI startups go public, most of the rapid growth will be behind them -- here's how not to get left out. Warren Buffett flipped his neighbor's $67,000 life savings into a $50 million fortune -- How much is that worth today? Market News and Data brought to you by Benzinga APIs
