How To Make A Budget Using ChatGPT – Bankrate.com
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Most people view budgeting as a major chore, but money management truly becomes easier when you have a strong plan in place for spending and saving. In recent years, tools such as digital apps have emerged to help simplify the budgeting process — and now, artificial intelligence (AI) technology can even assist with budgeting, in the form of chatbots such as ChatGPT.
ChatGPT is an online AI software that allows you to type instructions or questions, and it’s programmed to respond in a human-like, conversational manner.
People commonly use ChatGPT for assistance with writing essays and emails, translating text, creating resumes, making grocery lists — and much more. Here, we’ll go over how to use ChatGPT to create your household budget.
If it’s your first time on the ChatGPT website, you’ll be prompted to create an account. (Both paid and free versions are available.) Once you’re logged in, you can simply state your income in the “Send a message” field.
Example: “My monthly household income is $4,000 after taxes.”
You’ll receive a response that says if you need further information or assistance with financial matters, feel free to ask.
Provide your monthly expenses. The more thorough you are, the more comprehensive the results will be.
Example: “Each month, I spend $800 on rent, $150 on utilities, $150 on car insurance, $300 on my car payment, $150 on gas, $400 on groceries, $60 on streaming services, $300 on student loan repayment and $300 on discretionary spending. Please help me create a budget.”
The response you receive will add up your expenses and tell you how much money is left over each month. It will then offer further help with saving strategies.
This is where ChatGPT can become particularly useful by providing insight and suggestions. If you tell it what things you wish to save for, it can suggest how much money to save along with ideas to make the process easier.
After you’ve told ChatGPT your income and monthly spending, ask for more help by telling it your saving goals.
Example: “Please provide suggestions on how I can devote the remainder of my income to building up an emergency fund, a vacation fund and an IRA retirement account.”
When receiving the query above, ChatGPT recently responded with some information and practical suggestions:
In all, this provided some good starting points when it comes to practical advice and money-saving strategies.
One of the things that make ChatGPT interesting is it provides different (although usually similar and consistent) answers every time you ask the same question. It even incorporates a “regenerate response” option that will answer your question again, possibly delivering additional insights and strategies.
Once you’ve decided upon how much you can save toward your goals each month, you can add these as monthly budget categories and rerun your request for ChatGPT to create your budget. For example, you might add these to your expense categories:
Money for emergency fund: $150
Money for vacation fund: $100
Money for Roth IRA: $150
If you like to keep your budget in a spreadsheet, ChatGPT can help you move your newly created budget there. Once you’ve used ChatGPT to create the budget, tell it to provide the budget in a format for you to put it into a spreadsheet.
Example 1: Transform my list of expenses above into a table that I can copy into Excel.
Example 2: Transform my list of expenses above into a table that I can copy into Google Sheets.
It’ll respond by providing your budget in a table format, along with instructions on how to copy and paste the data into Excel or Google Sheets.
After ChatGPT creates your budget, it’s important to double-check its calculations. Make sure it has added up all of your spending categories correctly. If it lists the amount you have left over after expenses are subtracted, also calculate this manually to make sure it’s correct. It’s not unheard of for a chatbot to make miscalculations.
Also, double-check any financial advice ChatGPT gives you against one or more reputable online resources. For instance, in our example above, ChatGPT gave advice on how many months’ worth of expenses your emergency fund should be able to cover. You may decide to ask it a follow-up question.
Example: “What’s the best place for an emergency fund?”
ChatGPT’s response: In a recent session with ChatGPT, it answered this question by saying these funds should be in a bank account that offers both stability and liquidity. Examples it gave included a high-yield savings account, a money market account, a checking account and certificates of deposit (CDs) with laddering.”
Bankrate’s take: While those first three options keep your money liquid (and safe, as long as the accounts are with a federally insured bank or credit union), savers would do well not to lock money in a CD of any term that might be needed at a moment’s notice for emergencies. That’s because most CDs assess an early withdrawal penalty when you take out the money before the term ends.
As such, the bottom line is it’s always a good idea to check a chatbot’s financial advice against that of one or more reputable online resources.
Often, ChatGPT can reliably calculate your budget when you input dollar amounts for each spending category, as we’ve done in our example. In the results generated, it can also interweave some useful budgetary suggestions and strategies.
However, the chatbot can also help with budget-related requests that allow more room for creativity. In response to the query, “I’m a poor college student. How can I tighten up my budget?”, it provided 15 useful tips on sorting through essential and nonessential expenses, spending less on food and entertainment, and earning a little extra money.
In another recent ChatGPT session, it was asked, “I currently spend $400 per month on groceries. What are some ways I can reduce this to $300?” In response, it suggested doing 15 practical things, including:
Like digital budgeting apps, ChatGPT can help you create a budget and follow money management strategies. Once you input your income and spending amounts, this conversational AI tool can add up your spending and offer advice on how to save regularly for your goals.
As with any digital tool, it’s important for you to take the time to review the calculations and revise anything in your AI-generated budget to meet your individual needs. When the chatbot generates financial advice, always check it against reputable online sources or the advice of your financial advisor before moving ahead with any changes.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
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