Guide on Creating a Household Budget with Neural Networks, as Suggested by an Expert
In the modern digital age, artificial intelligence (AI) is increasingly being used to manage personal finances, offering users real-time insights and automation. From apps like Cleo, PocketGuard, and You Need a Budget (YNAB), to robo-advisors and digital wallets, these tools are revolutionising the way we handle our money.
However, Alexander Belogolov, head of the Artificial Intelligence and Data Analysis Department at the University of "Synergy", warns that these AI services come with potential risks. One of the most pressing concerns is data privacy and security. Sharing sensitive financial information with AI tools poses a risk of data breaches or unauthorised access. Belogolov advises users to check privacy settings for AI services and to review their personal expenses manually to ensure accuracy.
Another risk is the possibility of misleading or incorrect advice. AI may provide generic or flawed recommendations because it often lacks the ability to fully understand the nuance of individual financial situations and goals. Users are encouraged to verify AI advice and to complement AI assistance with human judgment and professional consultation when necessary.
Overreliance on automation is another concern. Users might depend too heavily on AI suggestions without critical assessment, possibly leading to suboptimal financial decisions. Belogolov also raises the issue of commercial interests influencing the advice given by AI platforms.
Local AI programs, installed in home networks, are designed to prevent the transfer of confidential data to the internet. However, algorithm errors are a risk associated with AI services, according to Belogolov. He advises users to occasionally review their personal expenses to catch any potential errors and to cancel unnecessary subscriptions, such as multiple music subscriptions, to save money.
Despite these risks, AI-powered budgeting can enhance financial management efficiency and insight. By analysing personal accounts, local neural networks can suggest where to cut expenses, evaluate spending on dining out and compare it to the average expenses of people with similar incomes.
As we embrace the benefits of AI in personal finance, it is crucial to remain vigilant about data security, verify AI advice, and to use human judgment when necessary. With these precautions in place, AI can be a valuable tool in helping us take control of our finances and make informed decisions about our money.
- What about the risks posed by AI services in managing our personal finances, such as data breaches due to poor data security or misleading advice based on a lack of understanding of individual situations?
- In light of the commercial interests that could potentially influence the advice given by AI platforms, how can we ensure that we receive unbiased financial advice?
- As AI tools continue to revolutionize the business of personal finance, how can we maintain a balance between relying on AI's automation and retaining human judgment when making financial decisions?
