AI Financial Advice A Double Edged Sword For Youth

Younger Americans are no longer just asking their parents for financial guidance on things like 401(k)s or investment strategies. A new, digital advisor has entered the scene: Artificial Intelligence. This shift marks a significant change in how Gen Z and millennials are approaching their financial futures.

The New Financial Friend For Gen Z and Millennials

AI tools like OpenAI's ChatGPT and Google's Gemini are becoming the go-to resource for young adults navigating the complexities of personal finance. From managing credit card debt to selecting stocks and ETFs, AI is being used as a constant guide. A recent survey from Intuit Credit Karma, which polled over 1,000 people, revealed just how widespread this trend is. According to the data, two-thirds of adults who have sought financial advice from AI have acted on its recommendations.

For many, this has been a positive experience. A staggering 80% of those who followed AI-driven advice reported that it was beneficial to their finances. Gen Z and millennial users are the most frequent adopters, with 82% of them turning to AI for money management. They use it for a wide range of topics, including:

• Setting financial goals and creating action plans (35%)
• Budgeting and managing expenses (34%)
• Optimizing savings strategies (33%)
• Navigating stock market investments (32%)

One of the key benefits users report is the ability to ask questions they might be too embarrassed to ask a human advisor. Three out of four AI users appreciate the judgment-free environment it provides for financial education.

A Helpful Tool with a Risky Catch

Despite the high rate of reported success, the reliance on AI for financial matters is not without significant risk. The same Intuit Credit Karma survey delivered a sobering statistic: over half of the respondents who used AI for financial advice admitted to making a poor financial decision as a result.

This highlights a critical paradox. While AI can empower users with information and action plans, its unvetted advice can lead to costly mistakes. The very technology that helps many improve their financial situation is also leading a substantial number of users astray, proving that it is far from a foolproof solution.

From Budgeting to Millionaire Dreams The High Stakes of AI Advice

Some users are pushing the boundaries of AI's capabilities far beyond simple budgeting. A trend on TikTok, dubbed the “90-day millionaire challenge,” involves creators using ChatGPT's advice as a roadmap to wealth. Similarly, a report from GoBankingrate explored whether ChatGPT could create a realistic plan for someone to become a millionaire on a $60,000 salary. The AI responded that it was "absolutely possible" with discipline and smart decisions.

However, financial experts urge extreme caution, emphasizing that complex financial advice should come from qualified human professionals. They warn that relying solely on AI can be a gamble, as the technology often lacks the nuance, accountability, and personalized context a human advisor provides.

The Dangers of Inaccuracy and Privacy Risks

The warnings from experts are backed by data. A 2025 report from Investing in the Web tested ChatGPT with 100 finance-related questions. The results, reviewed by human experts, found that the AI provided incorrect answers to 35% of the queries, with one in three of those incorrect responses being complete hallucinations.

Beyond the risk of receiving flawed advice, other money experts have raised concerns about potential fraud and identity theft. Sharing sensitive financial information with AI platforms could expose users to significant security vulnerabilities. These concerns are shared by the public, as the Intuit survey found that 51% of Americans worry about security and privacy leaks when using AI. This lingering distrust is why many still turn to more traditional online sources, including financial websites, social media, and search engines, before consulting AI.