We all want to manage our hard-earned money as best as possible, but it’s rarely a simple task. It may be especially complicated if you’ve set one or more savings goals or if other family members aren’t always able to contribute to monthly bills.
Unforeseen expenses can show up unexpectedly, such as a vehicle breakdown or a broken tooth. It’s easy to forget to deduct that trip to the grocery store or gas station, which could result in an overdraft charge or two.
This is when one or more tools powered by artificial intelligence (AI) can help you become a better money manager. In addition to creating realistic budgets and spending plans, AI can help you keep track of when money goes into your bank accounts and when it leaves.
AI can even analyze your spending habits and politely suggest that you buy fewer Stanley Quencher cups or Xbox games.
This article will tell you how an AI-powered budgeting application can help you take control of your finances and achieve your financial goals. Here are details of how AI can simplify your budget while providing a deep dive into your spending habits.
Understanding AI in Budgeting
AI incorporates machine learning algorithms and data analysis to provide users with assistance with hundreds of subjects.
For example, small business owners preparing articles for their website can use one or more AI applications to improve their article’s readability and SEO performance.
When it comes to personal budgeting, AI is already aware of common budgeting errors and challenges faced by busy users.
Here are some other tasks that an AI budgeting app can take over for you:
- Categorize your expenses. This helps you see exactly where your money goes each month.
- Warn you of unusual spending patterns. You’ll be able to review these to determine if fraud is a possibility.
- Predict expenses based on past purchases. For example, if you renew your fishing license or magazine subscriptions each year, you’ll get a heads-up ahead of time.
- Suggest areas where you can cut costs. If you enjoy a daily matcha or espresso, you may be thinking that a $4 purchase isn’t a big deal. The app may disagree.
- Help you accomplish financial goals. If you’re saving for a new bicycle or holiday gifts, an AI tool can help you keep track and warn you if you’re falling behind.
Next, we’ll look at some topics to keep in mind when you’re checking out one or more AI budgeting tools.
Choosing Your Budgeting Buddy
While most apps offer basics like categorizing purchases and syncing your bank accounts, there are additional features available. This is why it’s worth trying out several in “demo” mode.
Apps provide different insights into your spending habits. Do you want help understanding your spending patterns, or would you prefer suggestions for improving your spending strategies?
Another difference is their ability to refine your budget according to your financial habits. Is this something that will work for you?
Calendars that keep track of bills’ due dates are popular with many users, but not all budgeting applications offer them.
Last but not least: is the application truly time-saving for you, or is it too complex to be useful?
Here are links to three AI budgeting tools from Fortune Recommends’ 10 Best Budgeting Apps for 2024.
Of course, there’s nothing wrong with doing your own online search or asking friends for recommendations.
AI Budgeting Tools to Test Drive
Monarch Money: This application is popular with couples, as they can synchronize their bank accounts, access Monarch with their logins, and view joint reports. After a free demo period, several subscription options are available.
You Need a Budget, aka YNAB: This app allows you to “assign” your income to destinations such as monthly bills and savings goals. Because of its personalization features, YNAB’s creators describe the app as “a spending plan, not a spending prison.”
EveryDollar: Recommended for beginners, EveryDollar helps users set financial goals and create customized budgets. Users can test-drive the free basic version before upgrading to customized budget reports, paycheck planning, and other advanced features.