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AI gains traction among American Gen Z for money management

By Gloria Methri

July 31, 2024

  • America
  • Budget Tracking
  • Digital Financial Management
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AI, Personal Finance, Digital Financial Management Apps, Money Management, BudgetingA growing number of Americans, notably Gen Z, are increasingly using artificial intelligence (AI) to help manage their finances and investments.

According to the BMO Real Financial Progress Index, among the 37% of Americans using AI to help manage their finances, the most common uses include learning more about personal finance topics (49%), creating and/or updating household budgets (48%), identifying new investment strategies (47%), building savings (47%), and creating and/or updating their financial plans (46%).

While AI is helping Americans manage some aspects of finances, around two-thirds (64%) say AI cannot understand how emotions influence financial planning.

“AI offers great potential in the way we handle our finances, providing real-time insights and analysis. However, managing money is more than analytics; it is a deeply personal relationship shaped by emotions, experiences, and unique life circumstances,” said Paul Dilda, Head of U.S. Consumer Strategy, BMO.

“While AI handles technical aspects and routine tasks, a professional advisor brings a human touch, offering personalized guidance and understanding. Together, they create a holistic approach to financial management, ensuring more Americans stay on track towards their goals and make real financial progress.”

How Americans Are Using AI

The survey highlights how artificial intelligence is continuing to shape how Americans learn, work, and communicate, including:

  • Reshaping Research: Nearly three in five (59%) are using AI to ask questions about topics of interest, and 40% are using the technology for data analysis.
  • Productivity Planning: 39% leverage AI to build business, travel, exercise and meal plans and/or manage their schedules.
  • Changing Content Creation: Many Americans are using AI in their creative process, including developing written drafts (43%) and photo and/or video editing (42%)
  • Accessible Intelligence: More than half believe artificial intelligence can help people make more informed financial decisions (53%) and make financial planning more accessible for everyone (52%).
  • Optimistic Outlook: Among Americans who are not using AI for their finances, nearly a third are considering using the technology to learn more about personal finance topics (32%), increase their savings (31%), find new investment strategies (29%), create and/or update their household budgets (29%) and financial plans (27%), and/or for retirement planning (27%).

The AI Generation Gap

As Gen Z Americans begin navigating life changes, most are leveraging AI to plan for upcoming financial milestones – more than any generation. Gen Z is the most likely to use AI to ask questions about topics of interest (82%), create written drafts (75%), build a business, travel, exercise and/or meal plans (67%), and manage their finances and investments (61%).

In the last six months, 22% of Gen Z needed to make a large purchase such as a car, home, etc., 18% attended university or college, 15% switched jobs, and 13% started a business. However, 85% of Gen Z say concerns about their overall financial situation is the leading source of financial anxiety, followed by fear of unknown expenses (80%), housing costs (79%) and keeping up with monthly bills (76%).

58% of Gen Z believe artificial intelligence can help people make more informed financial decisions, and 55% are confident AI tools can help them make real financial progress.

Among the 89% of Americans who believe they are making real financial progress (4+ on a 10-point scale), 82% are confident in their financial situation, and 45% believe AI-powered tools can help them make real financial progress.

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