5 ways to let AI do your financial heavy lifting

5 ways to let AI do your financial heavy lifting

Sick of carrying your financial burdens alone? Sifting through bank statements, navigating investment decisions and tackling your budget every month can be a pain.

But in the age of robotic dogs and self-driving vehicles, artificial intelligence can help you cut through the slog and manage your finances easier than ever—and have fun doing it, Finder.com reports.

Use budgeting and expense tracker apps

The pen-and-paper method of tracking your money really is tried and true. Millions of people have tried it, and it’s truly easy to make mistakes.

As personal and unique as the handwritten word is, the complexity of modern personal finances makes it essential to use budgeting tools that aggregate payment details from many sources, autocalculate figures and generate big-picture reports.

That’s where AI comes in.

Budgeting and expense tracker apps typically use AI to scan your banking activity and identify your income and expenses to show you where your money is going.

Usually, all you have to do is create an account and follow the app’s prompts to connect to your bank accounts. After that, AI takes over and crawls your data, creating easy-to-read visuals that break down your spending categories. It’s a great way to clearly see if you’re on track to meet your goals and where your money habits need a little work.

Popular finance apps Cleo and YNAB (You Need A Budget) collectively have millions of downloads.

Take a glance at Reddit to see what people are saying about budgeting apps, and you’ll see how many people have gotten hooked on the freedom and protection that comes with having their finances scrutinized by a pair of artificially intelligent eyes. Of course, you’ll find complaints too. Not all apps are equal, but it doesn’t hurt to dive in and give one a try.

Set and forget your investments with a robo-advisor

If the thought of having Alexa listen in on your home conversations is a little disconcerting, take comfort in knowing that managing your money with AI doesn’t require surrendering your humanity to the dystopian control of a bot army.

In fact, much of the AI tech available today operates in the background with little or no interruption to your everyday life.

That’s certainly the case with robo-advisor investment services. While a “robo-advisor” might sound like C-3PO in a business suit, it’s actually just technology that selects and adjusts investments for you based on your goals, risk tolerance and preferences. SoFi, Acorns and Justwealth are a few examples.

One of the great benefits of using a robo-advisor is the low cost involved. You’re not paying for a professionally trained human financial advisor, although some robo-advisors come with professional human advice if you need it.

Robo-advisory fees often run under 0.5% of your total assets under management, while professional financial advisors may cost between 1% and 2%. To give you an idea of the savings, a 0.38% robo-advisory fee for a $100,000 portfolio runs around $380, while a 1.5% professional management fee would cost you $1,500—or $1,120 more down the drain.

This example may not reflect all the fees and costs you might pay, but it shows how much you could save by cutting back your asset management costs.

Monitor and improve your credit score

AI may be touted as a magic wand of sorts, but it can’t fix a bad credit score. It can, however, help you understand your score and find ways to improve it.

Giving consumers a peek at the breakdown of their credit scores is a natural evolution for an industry that has already been using AI for years to evaluate credit applicants’ risk levels and process approvals. In fact, machine learning has been used by financial institutions since the 1980s, with the FICO Score rating system officially launching in 1989.

Companies like Credit Karma and TransUnion provide credit monitoring services that use AI to scan individuals’ credit histories, spot weaknesses, suggest fixes and promote relevant credit products.

While no one wants to be inundated with ads tempting them to get into debt, this can be a good way to find out about low APR loans or balance transfer promotional offers that can help you consolidate debt, save on interest fees and maybe even get rewarded for everyday spending.

Many financial companies, including American Express and Capital One, offer free credit monitoring and personalized insights when you become a customer. Before signing up for a paid service, find out if your bank or credit card issuer already offers credit monitoring.

Get personalized advice from an AI financial coach

Paying your bills and setting aside money for a rainy day might sound straightforward until you actually sit down and do it.

Ticking off all the right financial boxes for yesterday, today and tomorrow can be complicated when you factor in debt repayment, emergency savings, investing, monthly expenses and everything else on your platter.

Wouldn’t it be nice if you had a knowledgeable coach available on demand to help you create a plan and stick to your goals? An AI financial coach can help.

Human financial coaches are a solid option, too, but AI coaching may be more affordable in some cases and can be used just about anytime, anywhere, provided you have access to the app.

AI has been serving the financial services industry for decades, but direct-to-consumer AI financial coaching is still relatively new.

Personal finance app Origin launched an AI-powered financial assistant that, among other things, offers a retirement readiness assessment and analyzes users’ spending patterns to make recommendations for cutting back expenses and bumping up their savings.

Negotiate lower bill payments

When you get into a rhythm of paying bills, your expenses can feel set in stone. But did you know that you may be able to ask for lower rates or fees for some types of expenses? Credit card interest rates and phone and internet costs may not be as fixed as you think.

If gearing up to haggle with a big company over prices sounds out of your league, let AI help.

Free chatbots like ChatGPT and Gemini can draft messages to your service provider requesting lower rates or fees. You should never give a chatbot sensitive personal or financial information like your bank account number or credit card number. But you can use AI to draft a template for the type of message you want to send and then copy it into your own document to complete with the details.

If you're willing to shell out a little money to save more in the long run, you can even sign up for an app that uses AI to negotiate expenses or debt repayments on your behalf.

For instance, Kikoff AI Debt Negotiation will, with your permission, request money-saving offers from your debtors. You’ll have the opportunity to review and accept any available offers within a limited time frame.

We aren’t yet living in a world where every household wakes up to a robot serving freshly made breakfast, but we do have a growing range of AI tools at our fingertips to save smarter, spend more wisely, make money and financially prepare for the future.

This story was produced by Finder.com and reviewed and distributed by Stacker.