How to make AI your personal financial advisor? | technology

Managing money and organizing the monthly budget are among the biggest daily challenges facing individuals and families, especially in light of the fluctuations of the global economy and high inflation rates. However, the recent technological revolution brought an unconventional solution. Artificial intelligence, which changed the features of the work and education sectors, is now capable of reshaping our relationship with money.

The average user no longer needs to hire an expensive financial advisor, or spend long hours in front of complex spreadsheets in Excel. Through free generative AI models and smart applications, you can turn your phone into a personal financial expert who works for you around the clock.

How does artificial intelligence understand your money?

The effectiveness of AI tools in financial management depends on their superior ability to process natural language processing (NLP) and analyze quantitative data at great speed. According to technology reports issued by organizations such as Gartner and the American MIT Technology Review, large linguistic models are able to monitor behavioral spending patterns that humans may overlook, and predict financial crises before they occur based on consumption data for the past two years.

By feeding the model abstract numbers, the AI ​​can categorize expenses, calculate percentages, and assess how sustainable your current financial lifestyle is compared to your long-term goals.

Turn your chatbot into a financial expert

To benefit from models such as Gemini or ChatGPT as a free financial advisor, orders must be carefully formulated through a strategy technically known as “order engineering”, and these are the steps in its application:

Step One: Prepare the Environment and Assign Role-Playing
Research from AI labs such as OpenAI and Google DeepMind proves that giving a model a specific role increases the quality and accuracy of technical answers by more than 30%.

As an example of the practical command you should write:

“I want you to work right now as a Certified Personal Financial Advisor (CFP), with 15 years of experience helping families get out of debt, organize moderate-income budgets, and achieve savings goals. Your approach should be practical, tough when needed, flexible with contingencies, and not suggesting high-risk investments. Are you ready to receive my raw data?”

Step 2: Provide the advisor with the “real financial file”
Here, artificial intelligence needs clear and classified numbers, and in this example we will apply the world-famous budget rule (50/30/20), which is supported by major financial bodies such as Investopedia, where 50% goes to basic needs, 30% to wants, and 20% to saving or paying off debts.

The applied example is here:

Here are my May financial entries:

• Net income: $2000.
• Inevitable fixed expenses: rent $700, bills and internet $150, car payment $250.
• Variable expenses: groceries and household $400, gas and transportation $150, entertainment and restaurants $350.
• Goal: I want to save $400 per month to build an emergency fund that will cover 6 months.
• Analyze this situation, tell me what’s wrong with the 50/30/20 rule, and suggest a modified schedule.

Expected intelligent analysis:
The model will immediately add up the numbers to find that your basic expenses are 55% above average, entertainment is 17.5%, while current savings are zero. He’ll re-examine the numbers and suggest cutting back on groceries and entertainment to save you the $400 needed mechanically without compromising your fixed rent requirements.

The third step: reactive management during crises and shopping
A real financial advisor accompanies you in your daily decisions, as artificial intelligence smartphone applications allow you to consult him immediately before making an unplanned purchasing decision.

Emergency Shopping Scenario: “Financial Advisor, I’m at the electronics store right now and there’s a display on a smart display for $350. My remaining budget for entertainment this month is only $100, and I have $200 in groceries that I haven’t used yet. Should I buy it cash or in installments? How will this impact my savings goal?”

The smart advisor’s answer: The artificial intelligence will immediately alert you that purchasing “in cash” will cause a deficit in the basic grocery item, and that installments will add a fixed commitment extending for months, which reduces the space for future savings, and it will advise you to postpone the purchase for a period of 3 months while allocating a new financial item to it called “welfare savings.”

The dilemma of security and privacy… Where is the red line?

When talking about the intersection of technology and money, privacy stands out as a top priority, with cybersecurity reports from the Cybersecurity and Infrastructure Security Agency (CISA) and consumer financial protection organizations indicating the need to completely differentiate between two types of tools:

• Specialized financial technology applications such as Wally or smart bank accountsThese applications use advanced encryption protocols at the level of 256-bit AES bank encryption and use open banking APIs for reading only without the ability to move funds, and they are safe to use thanks to strict legislative regulations.

• General generative AI models such as GeminiHere, the responsibility for security falls on the user himself, as the privacy policies of major technology companies, such as the terms of service in Google and OpenAI, stipulate that conversations may be reviewed by human auditors to improve the models unless the user turns off the recording feature manually.

But the golden rule of security is to deal with artificial intelligence in the language of abstract numbers and ratios only, and not to mention the last name, the name of the bank, the credit card number, or the account number. That is, tell him: “My income is 3,000,” and do not say, “My account in such and such a bank contains 3,000.”