Six Ways to Use AI to Improve Your Financial Life
While they can't replace human advisers, AI-based tools can take some of the guesswork out of financial tasks — from budgeting to filing taxes and investing.


Personal finances can be tricky to manage, especially if you find your life becoming increasingly complicated by the year. To make matters worse, we sometimes let our emotions get the best of us, leading to financial decisions that can be less than ideal. If this sounds too familiar, artificial intelligence (AI) can help you overcome these challenges and improve your financial life.
AI is particularly helpful if you need assistance with basic financial tasks and principles. Keep in mind, though, that for now, it can’t match the advice of a human financial adviser.
Still, AI can be an excellent companion as you aim to keep up with the demands of modern society. Take a look at how you can use it.

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1. Learn finance basics with AI
AI is not a personal finance expert, but here’s one area where it can excel: Helping you learn the basics. It serves as an interactive companion that excels at explaining fundamental financial topics.
For instance, if you want to learn about budget categories or debt payoff strategies, AI chatbots like ChatGPT and Perplexity can take you through a crash course.
But remember, an area where AI can fall short is in providing personalized advice. It can engage in a dialogue, but that isn’t quite the same as working with a financial adviser.
A human adviser will ask for your complete financial picture, including your expenses, debts and income sources. If you don’t disclose these to an AI — which you may not want to out of AI privacy concerns — it may not provide the best advice.
2. Manage your budget with AI
You may not have time to track every little expense and whether your budget is balanced, but AI can take the manual work out of budgeting. Companies already exist that use AI to give budgeting advice – and you might already be using it without realizing.
For example, Cleo is an AI chatbot with a sense of humor that can help you navigate your budget shortfalls. Rocket Money, a more traditional financial analysis app, utilizes artificial intelligence to analyze your budget and pinpoint areas for improvement.
The benefit of these the best budgeting apps is that they can eliminate the need for manual tracking. They typically let you connect your financial accounts and automatically populate all your income and expenses.
This allows you to quickly view a summary of your finances, including areas where you spend the most. Some might even offer suggestions on how to optimize your budget and spend less.
Another way people have used AI to manage budgets is by asking chatbots specific help questions. For example, you can ask an AI-powered bot to build a grocery list that fits a certain weekly budget and dietary needs, or ask Perplexity to compare rates at local auto shops or dry cleaners. You should, however, review their responses as the technology is not perfect – yet.
3. Automate your investing with AI
Investing strategies are virtually unlimited, with endless suggestions on how to build a better portfolio and beat the market. These suggestions often fall flat, giving people subpar suggestions at high costs.
To make matters worse, investing decisions can be reactionary, with people buying and selling stocks and other investments based on the day's news stories. Letting your emotions guide your investing decisions rarely produces the best outcomes.
AI can automate your investing strategy with tools like robo advisers. These tools use algorithms to optimize your portfolio according to your preferences, such as your income and time until retirement. They typically charge a management fee, but they are often much less than the fees you would pay to work with a traditional wealth adviser.
While robo advisers utilize algorithms that are sometimes referred to as AI, this is distinct from the technology employed by chatbots like ChatGPT. AI chatbots utilize large language models (LLMs) to generate responses, while robo advisers employ proprietary algorithms that inform investment decisions.
Various robo adviser options are available, including those from fintech companies and traditional financial institutions. Popular examples include Betterment, Schwab Intelligent Portfolios, and Vanguard Digital Advisor.
Read more: How AI Can Be Used in Investing
4. Use AI to raise your credit score
Understanding your credit score can be challenging. Credit score factors are often reported monthly, resulting in significant delays before they impact your credit.
This is another case where you may not necessarily know you’re using AI, but companies use it to power suggestions for you. Tools like Experian Boost and Credit Karma are designed to understand how credit-scoring models work. They consider each credit score factor, such as payment history and credit utilization, then provide suggestions for how you can improve your credit score.
Similar to robo advisers, these tools don’t rely on LLMs when making suggestions. However, they do rely on large amounts of data. For example, Credit Karma uses Intuit data to make AI-powered recommendations to its users.
Credit scoring is complex, and it typically takes time to recover from a rocky credit history. And if you have a significant amount of debt dragging down your credit score, you might benefit from working with a debt counselor.
Nevertheless, AI does a reasonably good job of helping you understand how you can improve your credit score.
5. Do your taxes with AI
Doing your own taxes can theoretically save you money, but it doesn't always work out that way. For instance, if you are self-employed, there may be many items you can deduct — but you may not know what’s eligible and so miss out on those savings. Still, not everyone can afford to pay a professional to prepare their taxes.
This is another area where AI can help. First, you can talk to a chatbot for advice, for example by asking ChatGPT for suggestions of what a self-employed person can deduct. You can also ask a bot like ChatGPT to explain IRS forms and rules in more digestible language.
In fact, companies like Blue J and TaxGPT have begun popping up to fit this exact use case. Additionally, even H&R Block and TurboTax launched AI chatbots for users, which are reportedly getting better and better each year.
Aside from chatting with a bot, tax preparation companies have already begun utilizing AI to streamline tax filing. Some companies, like FlyFin, Keeper and Gelt combine AI and CPAs to help you do your taxes.
“AI can now automate a large portion of the tax filing process, even going so far as to create tax forecasting on a client’s behalf based on their last year’s return,” Rachel Richards, CPA and head of product at Gelt, says. “Such automation not only saves time but provides both clients and their advisers with improved insight into the future ahead of them, allowing for smarter planning throughout the year.”
However, Richards also notes that AI is not enough to handle tax prep on its own, so don’t run off and try to use an AI agent to file. This is because taxes are highly personal, influenced by personal goals, investments and life events.
"Human guidance continues to be important for dealing with gray areas and modifying advice to meet each individual's own financial situation," Richards says.
Ultimately, you are responsible for mistakes made in your tax return, so you should check everything yourself or with a tax professional before filing.
6. AI for retirement planning
When planning for retirement, several key factors must be considered, including investment income, Social Security benefits and the rising costs of health care. Balancing all these factors in your retirement can be tricky, but AI can help you start putting together a basic retirement plan.
One way AI can help with retirement planning is by modeling an optimized withdrawal order, says Doug Carey, CFA, at WealthTrace, a retirement planning software company: "Instead of following a static rule-of-thumb where retirees withdraw from taxable accounts first, AI models can run simulations to figure out the best withdrawal order."
While you can pose these questions to bots like ChatGPT and Perplexity (being sure to protect your privacy), as Kiplinger retirement writer Donna Fuscaldo recently reported, companies have begun leveraging AI to help answer retirement questions like withdrawal orders or whether to convert a traditional IRA or 401(k) to a Roth IRA.
Although these decisions are complex, Carey says AI is great at helping to make them. However, AI is only a starting point when planning for retirement. Remember that it often falls short of working with a human financial adviser when seeking personalized advice.
Learn more about AI
- What Are AI Agents and What Can They Do for You?
- How AI Will Impact Your Workplace Retirement Plan
- What Is AI Investing?
- Major AI Companies You Should Know
- How to Protect Your Privacy While Using AI
- Have a Retirement Question? AI Can Answer That
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Bob Haegele is a freelance writer who began building his portfolio in 2018. During that time, he has written about various topics, including banking, credit cards, retirement, and AI. His work has appeared on Yahoo Finance, Business Insider, and U.S. News & World Report. He enjoys traveling and learning about other cultures.
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