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The topic is huge, and there is no way to cover all the ins and outs of AI in a short amount of time. However, I believe there are two potential areas of concern we should consider with AI.

The first is that AI can be a tool to help us keep track of our budgets. There are a multitude of smart phone and tablet apps which can track spending and budgets. For many years, I have recommended check register software because it includes budgeting features. As a tool, software simplifies the budgeting process and helps us see in real-time how we’re doing.

From that standpoint, AI can help us improve our finances by alerting us if we’re about to go over budget and informing us about how well we’re doing with the budget. In my previous article, mental accounting highlights a blind spot many of us have when it comes to money. Using software or device apps goes a long way to eliminate mental accounting or other blind spots.

The other concern with AI that we should consider is data collection and what happens to that data. AI is very often used to predict and influence behavior. In other words, AI collects data to then push advertisements to your screen when searching online. Ads may appear on Amazon, Facebook, or other sites we frequent. This is AI attempting to predict what we’re looking for, place ads in front of us, and influence our spending behavior.

In that sense, AI can both help and hurt us. If we’re struggling with impulsive purchases, AI will present many more opportunities to make purchases. This obviously does not help with budgeting. We need to be aware that ads may appear and consider how we will respond to those ads (i.e., discipline). The more we use AI, the more data it will gather to predict and influence our behavior.

We should also consider that the data AI collects, whether from keyboard strokes, questions asked to AI assistants, or conversations with a friend, is stored somewhere. Privacy concerns are nothing new. Any time our data is shared online, such as when purchasing items from a website, we cannot control what might later happen to that data. Data breaches are becoming all too common, and there is a similar risk with any data collected by AI.

Other than predicting behavior, we should consider who may have access to our data and what else they might do with it. Because AI is now a part of everyday life, we should anticipate what AI might collect or how AI might react and then be conscious about how we are using AI.

R. Joseph Ritter, Jr. CFP® EA is the Executive Director of Zacchaeus Financial Counseling, Inc., a 501(c)(3) non-profit organization based in Lake Junaluska, NC which specializes in tax services and financial counseling and planning for low and middle income households.