How People Are Using ChatGPT for Financial Advice

When Myra Donohue’s father, who is a financial planner, offered to help her with her finances, she politely declined.

With a background in accounting, she didn’t want anyone else’s help managing her $5,000 of credit card debt, not to mention car payments and other bills. But once Ms. Donohue, 28, sat down with her finances, she realized how overwhelming the process would be, especially with two young sons and her partner recently laid off from his electrician’s job.

She found a way to approach it in July, in a Facebook post about how to tackle your finances in seven steps. Step 1 was simple: List your income and fixed expenses and create a zero-based budget, a method that assigns a specific job to every dollar earned. Remembering how quick ChatGPT had been when she tried using it for other tasks, she decided to plug her numbers into the artificial intelligence chatbot and ask it to create a personalized financial plan.

Ms. Donohue said she wasn’t surprised by the advice the chatbot offered, but she was pleased by how quickly — within seconds — it generated a tailored budget for her.

A.I. chatbots have taken on many roles, including therapist, career coach, even romantic partner or friend. As more than half of Americans manage their finances on their own, many are turning to chatbots like OpenAI’s ChatGPT and Google’s Gemini for help tackling debt, finding better ways to save or figuring out how to invest in the stock market.

(The New York Times has sued OpenAI for use of copyrighted work. OpenAI has denied the claims.)

Two-thirds of adults who have used generative A.I. said they had used it for financial advice, and around 80 percent of those who acted on that advice said it had improved their financial situation, according to a recent survey of more than 1,000 people by Intuit Credit Karma. Younger generations are especially receptive: Around 82 percent of Generation Z and millennial A.I. users reported using it for financial guidance.

And while there are risks associated with chatbots — like data leaks, inaccurate information or bizarre advice, and the potential to cause users to spiral emotionally — the appeal makes sense. A.I. chatbots are accessible, fast and often free, or at least cheaper than a financial adviser. And for users too embarrassed to discuss money problems with a real person, chatbots offer an easier way to open up.

But financial advice served up by chatbots should be handled with caution. The Credit Karma survey found that more than half of the Americans who acted on the financial advice offered by generative A.I. said they had made a poor financial decision or a mistake in trying to follow the guidance.

Advisers recommend that people double-check A.I.’s suggestions and any links it provides with a professional before acting on them. Chatbots tend to take questions at face value and fail to challenge underlying assumptions or gather important context, which could be risky when seeking money advice, said Tyler Gilley, an associate wealth adviser at the investment firm Halbert Hargrove.

Still, Ms. Donohue said, she has gained more confidence about managing her bills and finances.

“It was really about me getting back on the horse,” said Ms. Donohue, a human resources administrator in Grass Valley, Calif. “I wanted a professional kind of service, but I also wanted to get it done without spending.”

Daily Prompts for Paying Down Debt

Jennifer Allan, 35, didn’t realize how much credit card debt she was racking up. As a real estate agent in Clayton, Del., with a newborn daughter and no paid maternity leave, she relied on credit cards for everyday expenses, like diapers and groceries.

“I woke up one day, and I was like, ‘If I use ChatGPT for everything else, why wouldn’t I just use it to help me pay down this debt?’” Ms. Allan said.

Her first prompt: “I’m in credit card debt. I have no idea how much credit card debt I’m in. I don’t know what to do.”

She owed $23,000, and decided to undertake a 30-day challenge to help her stay focused and drive down her debt. Each day, within the same chat, she asked ChatGPT for a new task to help her raise money, and she did each one. She sold a fresh watermelon with her debt total tattooed on it for $51, recovered $700 from her state’s unclaimed property registry and donated her plasma for $80, despite her fear of needles. She also saved nearly $600 by turning leftover pantry items into meals, she said.

Ms. Allan, who documented the daily challenge on TikTok, said she succeeded in paying off nearly half her credit card debt.

ChatGPT also suggested that she contact her credit card companies in an attempt to lower her balance. The companies offered to close the cards, but she declined.

Budgeting for Milestones

People looking for financial advice feel most comfortable asking chatbots about budgeting and tracking expenses, according to a survey by the financial services company Empower. For Kathryn Aguilo, a 30-year-old kindergarten teacher, that is exactly how she has used it.

She first used ChatGPT last year to help her and her fiancé save for their 180-person wedding on Long Island. The chatbot suggested they cut back on eating out, set a $40 limit when they did and stop opening bar tabs. It also suggested that they bring cash instead of using cards. Ms. Aguilo also saved by making her own wedding decorations and wearing $10 heels she bought with a coupon.

Then, she resold most of the wedding prep items on Facebook Marketplace for around $250.

After the wedding, Ms. Aguilo turned to ChatGPT to build an expense tracker and budget so she and her husband could start saving for a down payment on a home. They closed on a two-bedroom house in January, and Ms. Aguilo again went to ChatGPT for advice on how to pay down her 30-year mortgage faster.

“I’m not, like, asking it to create my future children and what they’re going to look like,” Ms. Aguilo said. “I do really just use it intentionally for saving, budgeting and to help us.”

Stock Market Moves

While many use A.I. just to break even, some use it to get ahead. Fresh off a breakup and in the same accounting job for six years, Alexander Stuart, 32, wanted a change.

In late June, Mr. Stuart asked ChatGPT to act as a “free college” to teach him about stock investing and how to “become one of the greatest traders.” He had $400 to put into the market, and the chatbot helped him plan trading strategies, like how to manage risk and choose when to buy and sell.

Then he put the guidance to the test. His first trade was on the chipmaker AMD, after the chatbot said it was the best investment out of 500 companies based on mergers, analysts’ notes, trading activity and more. He took the advice, he said, and his investment doubled the same day.

“It’s kind of exciting to see what ChatGPT is capable of,” Mr. Stuart said. “It’s been eye-opening to just learn that it could go so much further.”

With the chatbot’s help, he started trading almost daily and earned multiple returns on his trades. Now, Mr. Stuart’s account on Robinhood, a popular trading app, stands at around $1,600 — a big return on investment, though he realizes the gains could disappear just as quickly, and he said he’s investing for entertainment and educational purposes, not to pay his bills.

When Your Chatbot Fails You

Despite the success some people have had after asking A.I. to fix their finances, others say they have been led astray.

Take Mr. Stuart. About a month into investing, he lost nearly $60 on an Nvidia trade after realizing that one of the numbers ChatGPT cited as new was days old, something financial experts warn about when relying on A.I. chatbots. Since then, Mr. Stuart has started manually uploading and verifying the data on his own before letting the chatbots make his investing decisions. He is also comparing ChatGPT’s advice with suggestions offered by Grok, another chatbot.

Uploading information poses some risks, too, though. Ms. Allan, who completed the 30-day challenge, uploaded her bank statements to get personalized A.I. advice, but some advisers recommend that users keep personal details and sensitive information, like a Social Security number, away from the chatbot. They said uploaded information should be broad and generalized.

“Would you send it over email? If not, don’t put it into a chatbot,” said Molly Rimes, a financial adviser at Modera Wealth Management.

Blindly following a chatbot’s advice can be just as bad — even if the consequence isn’t financial ruin. Ms. Allan decided to embark on another month of prompts to settle her remaining debt. This time, the chatbot suggested more outlandish tasks, like selling pictures of her feet. She initially posted some for sale, but deleted them the next day.

“It is worrisome in the sense that I know that there are people out there that rely on it in the same way that someone would a professional,” said Mr. Gilley, the wealth adviser, about A.I. advice. “People will sometimes sacrifice that trust-building process in favor of the ease and quickness.”