AI is quickly becoming an integral part of many business operations across the world, but this innovative technology can also be a valuable tool for individuals. When it comes to managing our money, we all know we should be tracking our spending and sticking to a budget – however, this is often easier said than done.
AI-powered financial tools can simplify and streamline administrative tasks, such as logging every receipt and calculating expenses, helping you to better understand and make the most of your money. Smart technology within these apps can also offer valuable insights into investing and saving goals, as well as providing education on financial literacy, making it easier for everyone to optimize their income and live the lives they want to.
In this article, we will explore four transformative ways that AI can help you manage your money more effectively.
Track your spending with AI
With real-time updates, personalized suggestions and automated tracking, AI-driven money management can make keeping a keen eye on your money as easy as opening an app on your phone. The technology works by analysing and categorising your spending, notifying you when you are coming close to set budgets and detecting potential areas where you could save money. Some even have the ability to identify unused subscriptions and highlight better deals on your regular expenses.
By having access to a clear overview of your everyday, monthly, and yearly spending patterns, you can make more informed decisions and gain better control over your finances.
Create a realistic budget using AI
Whether you already spend time keeping your budget up to date or have never made one before, planning how you will use your money can help you reach long-term goals, plan for retirement, and avoid falling into debt. AI apps use machine learning algorithms to analyse your spending history, credit score, and financial habits to create a customized budget in mere minutes. These smart budgets also adapt over time, teaching you about better money management while optimising your savings potential.
One of the most helpful tools offered within many AI-driven financial tools is predictive analysis – notifying you of expected upcoming expenses. Based on your spending history, this can be particularly useful for those who struggle to make their money stretch or who suffer with impulse spending. These insights can empower you to plan ahead more effectively and allocate your money accordingly.
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Optimize savings with AI
Most people have multiple financial goals, such as paying off debt or saving for a house, holidays, or a new car. AI tools are extremely helpful in guiding you on how to split your money into separate funds, to help you keep track of and prioritise each goal and your progress.
Many banking apps already utilize some form of AI, offering smart features such as rounding-up transactions and automatically saving the difference to help users get ahead on their saving goals. But even just with a clearer overview of your money as a whole, saving itself becomes a more achievable goal.
Simplify investing using AI apps
Investing is typically considered something only wealthy people engage in, partly due to their increased funds but also because it can be a complicated and risky endeavor. But with the help of AI, investing is becoming more accessible to people at all income levels. Smart investing apps simplify the process, educating you on how to invest even small sums into global stocks and shares.
AI-driven advisors can also act as personal financial advisors, learning from your historical financial data and adapting to your chosen risk-tolerance and investment goals. Available at a much lower price than human advisors, AI can help you dip your toes into the world of investing and learn from simulated scenarios before investing your real money. However, it’s important to remember that there’s always a level of risk when investing – you can’t ‘beat’ the market.
Some applications can also support you with determining your personal risk tolerance, using your goals and even psychological surveys to assess your comfort with financial risk. They also measure your overall financial health, to offer personal advice on the best investment opportunities for you.
Take control of your finances with AI
As we have explored, AI is capable of analysing vast quantities of your personal data to create customized budgets, savings goals, and investment strategies. It can also offer achievable plans to help you get out of debt, or suggest ways to reduce your expenses. Though it can feel unnerving to put your faith in AI, and doing so should always be done with a sensible amount of sense-checking and apprehension, you may well find that adopting AI into your money management makes a huge difference to your financial health.