Ask the average person about their goals and an improvement in finances is almost guaranteed to be on the list. Many of us want to get our spending under control but can’t seem to figure out where all our money is going. At the end of each month, we often struggle to meet daily expenses until payday.
The good news is that artificial intelligence (AI) offers a solution to this common problem. There are many strategies you can employ to track and control your spending that AI can make simpler and easier, putting you on the road to financial freedom.
Track Your Current Spending
Any financial expert will tell you that the first step to better financial budgeting is reviewing the way that you are currently spending. And in the modern world, there are more avenues than ever before. Think of essentials like groceries and petrol for your car.
Then there are the endless subscriptions, whether for streaming services, food products, and whatnot. These many expenses can be very hard to keep track of and can easily add up over time. Then there are things like entertainment that are done on a whim.
Think of the times you go out with friends for drinks or play mobile games. The last few years have seen the rise of gambling online with crypto to preserve privacy. As Alan Draper writes, you can find no KYC casinos today and spend your funds on these.
As you enjoy all of these, it will be important to track and see where all your funds are going. Most of them provide immediate payouts, so it might happen that you add back some of the assets previously labeled as iGaming entertainment on your budget list.
Luckily, AI tools like Cleo analyze your spending, generate reports and offer insights about where your money is going.
Find Duplicate Expenses
Besides finding out what you’ve been spending money on, another strategy to budget better with AI would be to look for duplicate or redundant expenses.
Think of the gym membership you pay for but haven’t used for months or the streaming service you have two active subscriptions for. It might seem like a small deal on its own but it can add up to hundreds of dollars wasted each year.
AI comes in by analyzing your current monthly spending and identifying those being made to the same company or for the same product. For example, you might pay for Netflix but also pay for a different service that offers Netflix as a perk.
Another scenario would be when you sign up for a free trial for something but forget to cancel before you are billed. AI programs like Oversight specialize in finding these duplicates and redundant expenses that the average person might forget about and save you money in the process.
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Seek Out Cheaper Alternatives
The next thing you’ll want to do is find ways to save money, which will include finding cheaper options compared to what you have now. Anyone who’s ever tried to get a product or service at a cheaper rate will tell you that it can take hours and even days.
From comparing prices across different sites to calling customer service to consider other factors, it can be quite daunting.
But AI comes in by doing all of this grunt work and offering cheaper alternatives. We see this with tools like PayPal Honey that can search across hundreds of sites to find the best deal for a single product.
You also have sites like USwitch that help to determine the best deal for things like insurance and utilities. By leveraging these AI-powered tools, you can save both time and money.
Create a Budget
After knowing what you spend monthly, you’ll want to set up a budget moving forward that will make the most of your funds. To do this, you’ll need to look at your current income and then decide how much you want to save, spend, and invest.
In terms of saving, you’ll have to allocate a budget to essentials like rent/mortgage, utilities, insurance, taxes, and so on. Then you have things like subscription services, entertainment, shopping, and so on.
While there are several schools of thought, you’ll want to save a decent amount of your income for a rainy day and also invest some for the future. Instead of painstakingly doing all of this yourself, AI can come in and simplify it.
Apps like Moneybox help to organize finances by allocating funds for several categories and offering advice on which ones need to be expanded or shrunk. Some will even go the extra mile and automatically invest leftover money on your behalf.
Predict Incoming Expenses
We’ve talked about reviewing the past and making changes in the present with AI. But did you know that you can also predict the future with it?
One of the coolest things AI can do is predict the probability of certain things happening in the future and this applies to finances as well. Based on your previous behavior, changes in the market, and other factors, AI can predict whether your expenses will go up or down.
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Let’s say, for example, energy tariffs are being raised nationwide. An AI tool like Akkio can notify you about the costs going up before they happen, giving you time to plan for it. If your expenses are going down, you can also know ahead of time and perhaps plan to save or invest the leftover cash.
Track Savings
Many people are actively saving towards a future purchase, whether that’s a house or a holiday. But AI can make this process much more organized and even faster. For starters, AI can analyse your target amount and current habits and create a plan to save towards your goal in record time.
Apps like Plum even go as far as moving spare change from purchases to the savings pot, making the process easier than ever.
Anyone looking to take their savings to the next level could stand the benefit from the power of AI, which is fast being applied to all sorts of platforms.
