Should You Trust AI With Your Finances? An Expert Shares the Do’s and Don’ts

For this edition of On the Money, sponsored by Credit Karma, money expert, certified financial planner and president of Exit Wealth Advisors Ted Jenkin stopped by TODAY to share tips on how to use (and not use) AI for your finances.

Artificial Intelligence (AI) is everywhere right now. People are using it for everything from planning trips, to writing emails, to seeking health advice. So it’s no surprise that Americans are now turning to AI for help with their personal finances. When it comes to your money, there’s one important question: Is AI helping you make smarter financial decisions or quietly costing you money? The reality is both can be true.

According to a recent MIT study, nearly half of respondents have turned to AI for financial advice or information. And among Americans already familiar with generative AI, that number climbs. In fact, 66% of those surveyed by our sponsor Credit Karma say they use it specifically to seek out financial advice. While AI can be a helpful tool to guide your personal financial decisions, it’s also important to understand the potential dangers.

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When used correctly, AI can be a great financial assistant. It can help save time, improve organization and increase financial confidence but it should be used as a study buddy, not a decision maker.

• Budgeting and organization: Sometimes budgeting can feel overwhelming. AI is really good at organizing financial chaos quickly to help simplify the process and make money management less intimidating.
• Financial education and learning money basics: Think of AI as a financial encyclopedia that can chat with you. If you want to understand the basic concepts, like the difference between a Roth IRA and 401(k), how your FICO Score is calculated, or even how you mortgage works you can ask questions and AI will provide answers in understandable terms.
• Brainstorming ways to save or make money: AI can generate ideas to cut expenses, help create a list of questions to ask your Certified Public Accountant (CPA) or advisor and even brainstorm side hustles and additional ways to make money.
• Compare financial choices: AI can help walk through pros and cons of decisions. It can pull research and analyze data to help people see more clearly when weighing options like buying or leasing a car or choosing between credit cards. AI is a great research assistant but a terrible quarterback.

While AI can be a helpful tool, it can also get you into financial trouble and it can cost you — literally. This is where consumers need to slow down and verify what they’re hearing.

• Don’t share any personal data with AI: A good rule of thumb is that if you wouldn’t post it on social media, you shouldn’t put it into AI. Once you’ve entered your social security number, passwords or any account numbers into AI you could lose control of your information.
• Don’t treat AI like a financial advisor: The scary thing is, AI is becoming the fastest growing financial advisor and it isn’t even regulated. AI doesn’t know your personal story and it can’t understand your full financial situation the way a real person can. It can’t evaluate which decisions like retirement readiness, tax strategies or estate planning are best for you the way that a financial advisor can.
• Don’t assume AI is always correct: The hallmark of most AI chatbots is confidence, often overconfidence. But it’s important to note that AI can be wrong and can share information that is outdated, incorrect or biased. AI isn’t intentionally misleading people, it simply doesn’t know what it doesn’t know.
• Don’t make big money moves alone: AI should never be the only voice in life-changing decisions like retiring, selling your home or investing. It can support those decisions, but you should always verify with a human being.

• Don’t overshare: AI doesn’t need your personal data to help you, so avoid sharing personal information. Besides the obvious things like social security numbers, account numbers and tax returns, this also includes things like your address, your place of work or any other detailed information about your life. Stick to general questions or concepts to avoid potential dangers.
• Always verify information: Don’t blindly trust every piece of advice you get from AI. Be sure to double check financial guidance with trusted professionals and sources.
• Seek human advice: Big financial decisions still need a human touch for creativity and emotion. Always consult a financial advisor or CPA before making any financial moves. There are a lot of free, legitimate services out there that can help pair you with one.
• Remember the three R’s: When it comes to AI and your money there are no refunds, no redos if it makes a mistake and no regulation right now.

When it comes down to it, AI can be a great tool and financial assistant, but it should not become your financial decision maker.