Technology offers new methods to analyse budgets and investments. Photo / 123RF
Technology offers new methods to analyse budgets and investments. Photo / 123RF
Opinion by Diana Clement
Diana Clement is a freelance journalist who has written a column for the Herald since 2004. Before that, she was personal finance editor for the Sunday Business (now The Business) newspaper in London.
Artificial Intelligence (AI) is transforming personal finance management by offering budget and investment analysis tools.
AI tools like ChatGPT and Perplexity can generate shopping lists, compare products and analyse expenses.
AI should be used cautiously for financial decisions, as it may provide inaccurate information and lack human expertise.
Artificial Intelligence (AI) is transforming the way individuals manage their finances. The technology offers new methods to analyse budgets and investments, and you don’t need to be tech-savvy to benefit.
I’ve previously written about how personal financeapps are using AI to work better.
But this is about the likes of ChatGPT.com, Perplexity.com, Co-Pilot, or Gemini.google.com, which are called large language models (LLMs).
If you haven’t tried AI yet, visit one of those sites and type in a question [“prompt” in AI language] such as “What are some good questions to ask AI to improve my personal finances in New Zealand?” You’ll get a range of queries such as:
What percentage of my income should I save?
Should I prioritise student loan repayment or saving for a house?
How much do I need to retire at 65 if I want $60,000 per year?
What are SMART financial goals?
How do I teach my children good money habits?
What types of insurance are essential and which are optional?
If the answer isn’t sufficiently tailored to your personal situation, then ask follow-up questions, just as you might ask a friend or adviser. Does that relate to New Zealand? How would you tailor that to my income of $xx,xxx. But I want to travel before I pay off my student loan? And so on.
It’s important to realise that AI isn’t a human adviser and questions and answers should be treated with caution. LLMs sometimes “hallucinate”.
They’re improving by the month, but big financial decisions such as how to invest an inheritance, warrant human advice. Think of AI models as learning and idea-generation tools, not substitutes for expert guidance or real-time budgeting apps.
“No code” AI is aimed at newbies and uses publicly accessible AI models. Photo / 123RF
Ways to use AI to your financial advantage:
Supermarket: I asked: “I have $250 a week to spend on groceries for a family of four in New Zealand dollars, including cleaning and non-food items. Please provide a shopping list and meal plan.” Then I tried $150. Both plans were practical and could save thousands of dollars a year for many families.
Product comparisons: I used ChatGPT to compare prices and the percentage of the active ingredient sodium percarbonate in Napisan, Vanish, Frend, Sard, and Earthwise. It quickly found the best value among branded products. [It’s cheaper to buy the chemical itself online than buy branded].
Expense analysis: Perplexity helped calculate that my average café coffee costs $6.04, while homemade — beans at $27/kg, oat milk at $4/L, electricity, depreciation on an $800 machine — costs $1.68.
Investments: Ask AI things like, “What asset allocation should a New Zealander of X age, with X years until retirement and XYZ investments, have?”
Tax savings: I asked Perplexity how to save tax on investments in NZ, including KiwiSaver. It returned surprisingly good answers with links to guides from BNZ, Moneyhub, Kernel, and other reputable sources.
KiwiSaver: When I asked Gemini about making $10 a week voluntary contributions invested in a growth fund for 20 years and another five in a balanced fund, AI returned good answers with a variety of scenarios depending on expected returns. It said that $13,000 could grow to nearly $38,000, depending on returns. Your provider may offer free telephone advice that does those numbers for you.
Insurance: One LLM answered an insurance question incorrectly. A follow-up, of “are you sure?” returned the right answer. That experience reiterated, however, that AI isn’t always to be trusted. If two or more LLMs return different answers, don’t rely on the answer.
Scams: I asked about a Dutch lottery scam. Perplexity explained it and advised me not to respond. Good info, but, even if an LLM says something is not a scam, take that with a pinch of salt and ask experts such as your bank’s fraud experts or NetSafe.
Budgeting: I cleaned my bank statements in Excel and asked ChatGPT for a budget. It did well, but don’t upload sensitive data, and note that AI isn’t perfect with numbers.
These examples are “no code” AI, aimed at newbies and use publicly accessible AI models. It’s also possible to use more complex models such as those from LLaMA, Falcon, or GPT-NeoX, FinBERT, and/or combine these tools with other tools such as spreadsheets for automatic analysis.
Just like human advice, AI works best when you’re open to listening. “My situation is different” is one of the biggest cop-outs in personal finance.
