Four ways ChatGPT could improve your finances

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Everyone seems to have an opinion on ChatGPT – the artificial intelligence computer programme that can comprehend and produce a response using human-like language rather than giving an answer that sounds like a robot.

ChatGPT is a tool that has the potential to make a positive impact, but it remains to be seen if it’s going to be for the greater good of humankind or whether it signals the beginning of the end!

This type of AI can have entire conversations, admit mistakes, challenge incorrect premises, write essays, scripts, articles, and make headlines.

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There are many applications that can be used with ChatGPT, but let’s look here whether it can help in the realms of one’s personal finance responsibilities on a day-to-day basis.

It can obviously supply and provide financial education, especially if you’re new to personal finance, but it can also help with areas such as budgeting, investing and retirement planning.

Here are four ways it could be useful in the space of personal finance:

1 Budgeting

Budgeting mainly involves setting a plan for how money is spent each month, based on an individual or family unit’s income and expenditure. 

With ChatGPT’s help, one can make a budget that is tailored to specific needs.

To get started, you let ChatGPT know how much money you earn each month and how much is spent on different things, like rent, groceries and entertainment. 

Once this information has been in inputted some financial goals can be set, like saving up for a holiday or paying off a credit card by a certain date – or even longer term goals such as saving for a child’s future university costs. 

The budget can then be checked regularly and adjusted as needed. If you need to use AI to carry out this exercise then it can only be a good thing in this respect.

2 Understanding financial planning concepts

ChatGPT can be a helpful tool for expanding one’s financial acumen and vocabulary. It is possible to input specific questions or prompts related to terms one may want to better understand. 

For example, ChatGPT could be asked, “What is the difference between secured and unsecured debt?” or “What is the difference between savings and investments?”

A good financial plan acts as a guide through one’s life journey. It allows someone to be in control of their income, expenses and investments so it is essential that concepts and terms are understood.

ChatGPT may just be the leg up someone to get going on their journey, or simply improve their understanding of personal finance.  

3 Retirement planning

Retirement planning is an integral aspect of personal finance that many people overlook for way too long.

ChatGPT can assist with retirement planning by providing guidance based on current savings and projected income. This can then help estimate how much savings might be needed to achieve those retirement goals. 

It can also provide information on all the different retirement savings options available.

However, I would always advocate seeking professional advice when it comes to retirement planning and accurate cash-flow forecasting. 

4 Will writing

It’s now possible to create a detailed will with the help of ChatGPT. Begin by identifying assets and beneficiaries. Then make a comprehensive list of all assets, including property, investments, personal belongings and any other valuable possessions.

When drafting a will prompt for ChatGPT it’s essential to use clear and concise language to ensure that instructions are accurately reflected.

I fear that many people will be tempted to rely on AI-language models to create all sorts of documents on their behalf. However, creating a legally binding will requires attention to detail and a thorough understanding of applicable laws.

I don’t advocate relying solely on ChatGPT to create a will.

While ChatGPT certainly does not replace proper financial planning advice, it can help one make sense of terms and potentially reach financial goals faster.

Rupert Connor is partner at Abacus Financial Consultants