Artificial Intelligence (AI) has entered almost every corner of our lives, from the way we shop to the way we drive. And now, more and more people are turning to AI tools and chatbots for financial advice. With apps that promise to “automate your budget” or “optimize your investments,” it’s easy to see the appeal.
But when it comes to something as personal and high-stakes as your financial future, relying solely on AI can be risky.
At SolveYourDebts.com, we understand the importance of using the right tools to support your financial wellness. While technology has its place, there are serious downsides to letting algorithms guide your financial decisions, especially if you’re living paycheque to paycheque or dealing with debt.
Here are some of the biggest risks to keep in mind:
1. AI Doesn’t Know Your Whole Story
AI tools work by analyzing data and offering solutions based on patterns. But your finances aren’t just numbers, they’re tied to your values, goals, family dynamics and mental health. A chatbot doesn’t know that your rent just went up, your child was diagnosed with a disability, or you’re helping your parents pay off their mortgage.
Without context, AI can’t provide advice that truly fits your life. It might suggest putting money into investments when what you really need is help getting out of debt. Or it might tell you to cut your grocery budget without realizing you’re already using a food bank.
2. Generic Advice Can Cause Harm
Many AI budgeting tools offer one-size-fits-all recommendations: cut this, save that, invest here. But what works for a single person with a high income doesn’t apply to a family of four barely keeping up with rising living costs.
Financial planning should be customized, and sometimes, a “bad” decision (like deferring a bill to buy winter boots for your kids) is actually the right one in the real world. AI can’t always see that nuance.
3. Sometimes AI Just Gets the Math Wrong
Believe it or not, AI can make simple math mistakes, especially in more complex financial scenarios. It might miscalculate debt interest, give incorrect budgeting breakdowns or overlook the impact of compound interest altogether. We’ve even seen tools suggest savings plans that don’t add up, or distribute spending in ways that leave users short at the end of the month.
When you’re trying to build or repair your finances, even small math errors can have big consequences, like overdraft fees, missed payments or falling short on rent. That’s why it’s important to double-check any numbers AI gives you, or better yet, work with someone trained to get it right the first time.
4. AI Can Miss Warning Signs
When you speak to a real human, like an accredited financial counsellor, they can detect early warning signs of financial distress: patterns of overspending, emotional spending habits or the slow buildup of credit card debt. AI, however, only sees numbers and may not flag the emotional or behavioural issues that often underlie financial struggles.
These blind spots can lead to serious consequences, especially if the AI tool keeps nudging you to “optimize” or “scale up” without addressing the basics, like building an emergency fund or managing credit wisely.
5. Security and Privacy Concerns
Using any digital tool means sharing your financial data. But not all apps or platforms are secure, and many free or low-cost AI tools collect and sell your data to advertisers or third-party companies. That could expose you to unwanted marketing, financial scams or worse.
Before using any financial AI tool, always check the fine print:
- Who owns your data?
- Is it encrypted?
- How is your information stored, and can it be deleted?
If you’re unsure, it’s safer to stick with a trusted, accredited financial organization or speak to a real advisor who values your confidentiality.
6. AI Can Encourage Overconfidence
Just because a chatbot gives an answer doesn’t mean it’s the right one. Many people assume AI tools are smarter than they are and follow their advice blindly. This can lead to overconfidence in risky investments, unrealistic savings plans or unsustainable debt repayment strategies.
So, Should You Use AI at All?
AI can be a helpful starting point. It can track your spending, generate charts or remind you when bills are due. But it should never replace personalized, expert guidance, especially if you’re dealing with debt, financial anxiety or major life changes.
Think of AI like a calculator: useful for doing the math, but it doesn’t tell you what to calculate or why.
Get Real Support From Real People
At SolveYourDebts.com, we believe financial advice should come from trusted, trained professionals who take the time to understand your life, not just your bank balance. Our accredited financial counsellors offer free, confidential guidance to help you create a realistic budget, manage debt and build a solid foundation without judgment or pressure.
If you’re feeling overwhelmed, unsure where to start or tired of trying to figure it all out on your own, reach out for a free consultation with one of our non-judgmental, empathetic, accredited financial counsellors. Sometimes, a real conversation is the best financial tool of all.
