Using AI for money advice? You might want to read this

You have reached your maximum number of saved items.

Remove items from your saved list to add more.

Save this article for later

Add articles to your saved list and come back to them anytime.

In one of my personal finance classes at Harvard, I asked students to use AI to help answer a simple question: would you prefer a car loan at 10 per cent for one year, or 2 per cent for ten years?

Their AI chat tools confidently responded with detailed calculations, claiming “10 per cent for one year is always best”. Only one of my forty students realised it was wrong. “I would prefer the 2 per cent loan because I could always pay it off in one year”, they correctly pointed out.

If 97.5 per cent of my Harvard advanced economics students can be fooled by AI, what hope do the rest of us have? It’s becoming a popular tool, with four in ten Australians using AI for their personal finances. For those aged 18-29, it is eight in ten.

With professional advice costing upwards of $5,000 a year, it is no surprise that Australians are turning to free AI tools to help guide their financial decisions. And while AI can be genuinely useful for managing money, my Harvard undergraduates will now be the first to tell you about its many pitfalls.

But that doesn’t mean you should completely write off AI as a tool to help improve your finances. There are some scenarios where AI can be helpful, and some where it’s best left alone.

My super fund’s no help. So how do I choose a good financial........

© WA Today