In recent years, artificial intelligence (AI) has quickly become integrated in our everyday lives. Even in the personal finance space, AI is becoming a popular tool for financial advice. In a 2025 survey, 46% of U.S. adults said they had asked AI for help with their personal finances and 50% said they trusted AI for financial advice.
But is it really safe to get financial advice from AI tools? Not exactly. While AI can help with simple tasks like analyzing your budget, it’s prone to mistakes. That’s one reason financial advisors report that they rarely use AI to generate advice or financial plans.
So if you’re considering using AI for financial guidance, the best approach is to verify the advice. Depending on the kind of information you’re looking for, this may include using financial calculators online, reading articles written by financial experts, or consulting with a qualified professional.
Does AI give bad financial advice?
The main problem with using AI for financial advice is that it’s not always right. And unless you’re a financial professional, you may not be able to detect where the errors are. In fact, studies show that humans tend to be overly confident in the information they receive from AI tools.
Here are a few statistics to keep in mind before taking financial advice from AI:
- 52% of people who followed financial advice from AI said they ended up making a bad decision or a mistake.
- 19% of Americans have lost at least $100 as a result of following bad advice from AI.
- OpenAI research found that newer AI models hallucinate (meaning they produce incorrect or misleading results) up to 48% of the time.
- 45% of financial advisors who use AI for their work say the biggest problem they encounter is inaccurate data.
So while many people treat AI like a virtual financial advisor, it’s not as reliable as a real professional. AI can give you misinformation because it doesn’t have enough context to offer personalized feedback, it’s using outdated information, or for a number of other reasons.
How can AI help you with your finances?
While AI isn’t the most reliable source of information, it can still be helpful for basic financial tasks like budgeting.
One way AI helps is by making financial guidance more accessible. For example, if you’re too embarrassed to discuss your financial situation with anyone, or you don’t have the money or time to hire a financial advisor, a tool like Gemini or ChatGPT can remove those obstacles.
AI can also complete a variety of tasks that you might struggle with one your own, including:
- Drafting a simple budget
- Checking your budget for mistakes
- Creating a debt-payoff plan
- Comparing loan offers
- Breaking financial goals into small action steps
Depending on where you currently go for financial advice, AI may also be an upgrade. For example, social media is the most popular source of information for people who seek financial guidance online. Considering that most influencers are not qualified to discuss finances, double-checking their advice against AI could save you a few financial headaches.
Pros and cons of using AI for financial advice
With AI tools so easily available, it’s tempting to use them for all kinds of advice. But when it comes to financial guidance, you might regret using AI. Here’s what to consider before turning to these powerful but imperfect tools.
Pros
- Convenience: AI can be useful for completing simple financial tasks quickly.
- Access: You can use AI 24/7, without having to vet and hire a financial professional and without having to leave your home.
- Judgement-free feedback: Many users find using AI less intimidating than asking a friend or a financial professional for help.
- Affordability: Using AI is more affordable than hiring a financial advisor.
Cons
- Bad advice: More than half of those who sought financial advice from AI say the advice caused them to make mistakes.
- Generalizations: AI tools often lack the context needed to advise you on your personal situation.
- Outdated data: AI doesn’t always use up-to-date information, such as the most current news on student loan forgiveness programs.
- Lack of transparency: It’s not always clear where AI finds its sources or how it arrives at certain conclusions.
- User error: If you input the wrong numbers or use incorrect terminology, you can get faulty calculations or advice.
- Security/privacy: Sharing sensitive data and documents such as your bank statements is discouraged since the information can be used to train AI models.
- Better alternatives: You can get personalized advice for free or at a low cost from an NFCC-certified credit counselor or through the advisor who manages your employer-sponsored retirement account.
Bottom line: Always verify financial advice from AI
If you use AI for financial advice, don’t assume the advice is accurate. Instead, compare it to at least one other trustworthy source. Depending on the type of information you’re looking for, that could include one or more of the following:
- Financial calculators: Try using a free financial calculator, like this consolidation loan calculator from Prosper, to double-check the math.
- Nonprofit credit counseling: Reach out to an NFCC-certified credit counselor for free or low-cost counseling on topics such as budgeting, debt management and improving your credit.
- Financial advisor: Hire a fee-only fiduciary advisor who can review your full financial picture, not just a small snippet of information. You may also have access to free financial advising through your employer.
- IRS support: Income-qualified taxpayers can get free tax preparation help through the IRS’s Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs.
Of course, it’s also a good idea to take a proactive approach to learning financial basics like how to manage your money day-to-day. By engaging in ongoing learning about financial topics, you’ll reduce your likelihood of taking bad advice.
A few great ways to improve your overall financial knowledge are by reading articles and books written by credentialed financial professionals. You can also check out free courses like Prosper’s Money 101 and Credit Scores Demystified webinars.