This is an excerpt from Dollar Scholar, the Money newsletter where news editor Julia Glum teaches you the modern money lessons you NEED to know. Don’t miss the next issue! Sign up at money.com/subscribe and join our community of 160,000+ Scholars.

As someone who watches a lot of TV, I love a good plot twist.

The moment in season one of Westworld where the audience finds out that Bernard is a [REDACTED]? Nuts! When Eleanor has the epiphany that what she thought was The Good Place is actually [REDACTED]? Wild! And the reveal that [REDACTED] was Gossip Girl all along? Absolutely bananas!

I’m such a plot twist fan that I’ve come to expect them whenever I start a new show (which, yes, kind of defeats the purpose). But I never thought I’d encounter a plot twist while writing Dollar Scholar.

Last month, I began reporting this issue about ways I could incorporate artificial intelligence (AI) into my finances, only to discover that it’s BEEN HAPPENING THIS WHOLE TIME. (Sixth Sense vibes.) Somehow I just never realized it.

Welp, let’s dig in.

Can I use AI to get ahead financially?

You probably remember that ChatGPT, which uses natural language to answer prompts, all but broke the internet when it launched in fall 2022. The chatbot has proven tricky to use for financial purposes, though. Horror stories abound about ChatGPT’s inaccurate calculations, hallucinations and challenges with lack of context. Even when it does give solid financial advice, it only provides general tips — nothing individualized, which is key in personal finance.

The public has caught on. In a 2023 CNBC survey, just 37% of Americans said they were interested in having AI help them manage their money. A separate poll from the CFP Board found that 51% of investors said they had little to no trust in advice received from generative AI.

Not all artificial intelligence is created equal, though. Jennifer White, senior director for banking and payments intelligence at J.D. Power, emphasizes that the term “AI” encompasses a wide variety of products with a wide variety of implementations.

“ChatGPT gets all of the focus now. It’s the new shiny thing that everybody talks about,” she says. “And that is an application of using big data and computing capability in order to produce output. But it’s only one application.”

For instance, White says, AI can do a lot when it comes to culling data, identifying behaviors and using that information to personalize experiences or provide recommendations.

And here’s what blew my mind: This is already happening.

Like, right now.

“A lot of the companies that you already work with are using AI — and have been using AI — for a long time to analyze the data of what you have been doing,” says Spencer Betts, a certified financial planner with Bickling Financial Services.

Although I may have envisioned opening up the ChatGPT website and typing questions about retirement into a box, I’m actually much more likely to encounter AI through financial institutions like Fidelity, Bank of America and Vanguard. Betts says these companies have been using AI internally for years to analyze my spending and saving.

Once I started looking, I found examples of this everywhere.

In 2021, USA Bank rolled out a Pay Yourself First tool that used AI to automatically identify ways customers could save money based on their cash flow patterns. Bank of America has an AI assistant called Erica that has seen 2 billion interactions since 2018. Schwab unveiled an AI-powered product in 2022 that helps individual investors pick stocks that align with a certain theme.

“I don’t think the AI tools are intelligent enough to be predictors,” says Betts, also a CFP Board ambassador. “I think they’re very good analyzers of data, predictors of where data should be.”

Now that I have this knowledge, there are several ways I can take that AI data analysis to the next level.

One is budgeting. Betts says the bank where I have my checking account probably tracks all my spending, which means it can call upon AI to categorize those transactions. It’ll show me simple things like how much I spend on eating out at restaurants versus cooking at home, often with easy-to-understand charts. Then, if I’m unhappy with the results, I can adjust my habits accordingly.

Could I do this myself with paper, a highlighter and a list of my transactions? Of course. But this saves me time and effort, which are two major hurdles to getting myself on a budget. The less friction, the more likely I am to do it.

Another super useful application lies in comparison. Financial institutions can use AI analysis to compare my behaviors with people in my same age range, income level or geographic area, which can help give me an idea of whether I’m on track to meet goals.

That can ultimately be the push I need to, say, beef up my investment portfolio or increase my 401(k) contributions.

“The big thing that AI is doing for our industry is interpreting huge amounts of data and giving us perspective,” Betts adds. “[It can] tell people, ‘This is where the Joneses are; this is where you are. Here’s three steps to get you from where you are to where you want to be.’”

Like it or not, AI has already made an impact on my life. Companies I know, trust and have used for years are relying on AI to analyze data and make suggestions for my money.

So while I may be skeptical of ChatGPT (or Gemini or Copilot or whatever the latest iteration is), I shouldn’t write off AI entirely.

“Those tools could be used to help you see patterns in data that you, frankly, haven’t been trained to look for yourself,” White says. “That’s where the power lies.”

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According to a recent issue of Dollar Scholar, the Money newsletter from news editor Julia Glum, there is a surprising plot twist in the world of personal finance. As someone who loves a good plot twist, Glum shares her excitement for unexpected reveals in popular TV shows like Westworld and Gossip Girl. However, she never expected to encounter a plot twist while writing about incorporating artificial intelligence (AI) into personal finances.

Glum explains that while researching for the issue, she discovered that AI has been a part of personal finance for quite some time. She references the launch of ChatGPT, a chatbot that uses natural language to answer prompts, which caused a stir in 2022. However, it has proven to be unreliable and lacking in personalized advice. This has led to a decrease in public interest in using AI for financial management.

But not all AI is created equal, according to Jennifer White, senior director for banking and payments intelligence at J.D. Power. She explains that AI encompasses a wide range of products and implementations, and ChatGPT is just one example. AI can also be used for data analysis and personalization, and this is already happening in the financial industry.

Spencer Betts, a certified financial planner, confirms that many companies are already using AI to analyze customer data and provide personalized recommendations. Glum admits that she had envisioned using ChatGPT for financial advice, but she is now realizing that AI is already integrated into the services of financial institutions.

So, while Glum may have been expecting a plot twist in her research, she was surprised to find that the twist had already happened. AI has been a part of personal finance for some time, and it is likely to continue playing a role in the future. 

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