Two Key Signs ChatGPT Just Gave You Terrible Money Advice

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Financial advice can get expensive with a human financial advisor, which is why it makes sense to turn to ChatGPT. A 2024 Experian study found that 47% have sought out AI for financial advice and almost all (96%) have had a positive experience.

But is it accurate? 

A research paper by Andrew W. Lo and Jillian Ross found that when they used ChatGPT 3.5 for financial advice, it spit out made up names for a paper it used as research for the responses it gave. Giving false information, let alone a huge error like fake names, means that following advice from ChatGPT blindly could lead to some bad consequences for your wallet.

Here are some other signs that ChatGPT gave you terrible money advice.

You Got Specific Advice on How Much Money to Invest

Any answers ChatGPT gives you that relies on more complicated math calculations is probably inaccurate and it’s best to stay away from it.

According to Money.com, researchers found that since ChatGPT is a large language model, it is unable to reliably solve math problems, especially ones beyond the elementary school level. 

So if you’re asking it for investing advice or to predict how much money you’ll have in your brokerage accounts in the future, you probably can’t rely on it. As in, if you were hoping to see if you have enough invested now for when you’re ready to retire, you’re better off using other tools.

It Gave You Advice Based on Changing Regulations

Although ChatGPT regularly updates its data, it may not have the most up-to-date information on financial regulations. Think about all the current legislation that may be changing at a fast pace (like federal student loan programs). 

While some newer ChatGPT models are able to access the internet to help you get answers, it’s better not to rely on it. Or at the very least, take the time to verify whether the information ChatGPT gave you is accurate.

But if you have to do that, what is the point of using ChatGPT in the first place?

Bottom Line

Many experts say that ChatGPT is fine if you’re looking for basic information or financial advice, such as strategies on creating a budget that works for you. 

However, the advice it spits out might be too generic for you. For example, if you’re looking to trim your budget, ChatGPT may not be able to look at your spending and budget in detail to recommend specific advice. 

And if it did, it may not take into account prices of goods and services of where you live.

In fact, ChatGPT results sometimes recommend that you consult a financial advisor for advice that’s more tailored to your individual needs. 

Sure, ChatGPT may be fine if you want surface-level advice, but any deeper, you’ll either need to turn to experts like financial advisors, or to read books written by such folks. Even if you’re not ready to work with a human advisor, consider other tools like retirement projection calculators or budgeting tools that offer insights into your spending based on more accurate data.  

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