Introduction

With the rising cost of living making expenses related to traditional financial institutions including financial advisors more and more unaffordable, many Aussies are looking to alternative methods and strategies to tackle their finances. While some may look to social media finance influencers for their advice, or leverage buy now pay later services to afford bigger purchases - the new emergence of A.I technology is now helping many Aussies answer their questions around investing, saving, budgeting, cash flow management and tax returns. 

Table of contents: 

• Introduction 

• Confidence with Personal finance

  • Budgeting

  • Cash flow management

  • Filing tax returns

  • Saving for the future 

  • Investing money

• Strategies used

• Ranking of A.I compared to other tools

• Openness to using A.I 

  • Platforms used

• Do you follow the advice given & perceived quality of advice 

• Respondent experience to A.I

Confidence with Personal finance: 

During this period of significant increases in the cost of living, personal finance has been a particular point of interest for many Aussies. More than 57% of respondents were responsible for all of their household expenses, and another 28.84% were jointly responsible for their household bills. However, many are not confident in their ability to handle different areas of their personal finance, with close to 16% noting no confidence in their ability to file their tax returns and 28.5% reporting no confidence in their ability to invest. 

While respondents report a varying degree of confidence in each area of their personal finance, a significant percentage of respondents report a lack of confidence or neutrality in each area, which could signify a tendency to under-report, or highlight a need for education. In particular, those making less than 30k, South Australians and female respondents tend to report less levels of confidence in each of these areas. 

Budgeting: 

Budgeting is an area that many respondents reported being a strength, with 78% reporting some level of confidence in their ability. While at least 70% of all demographics reported degrees of confidence in their budgeting skills, those making under 30k, those 55+, Victorians, and those who have kids reported having the highest percentage of respondents who reported having no confidence in their ability to budget with 8.2%, 7.5% 7.48% and 6.92% respectively. 

Men also reported having more confidence in their ability to budget, with only 4% lacking any confidence in their budgeting skills as compared to 7% of women respondents. 

Overall, those making over 75k, those aged 25-34 and those living in Western Australia were significantly more confident in their budgeting abilities compared to the average Australian, with over 80% of each demographic reporting some level of confidence in their budgeting. 

Cash Flow management: 

Cash flow management was the largest strength area for respondents, with close to 80% of all respondents reporting confidence in managing their cash flow. 

Those living in QLD (86%) and making between 125-199k (90%) reported the highest level of confidence in their ability to secure and manage their cash flow, as compared to those making under 30k of whom only 71% of respondents reported any type of confidence. 

Filling out tax returns: 

Overall, 63.85% of respondents reported some degree of confidence in their ability to fill and file their tax returns. 

However, this area of personal finance saw the largest discrepancy between male and female respondents with 82.63% of men reporting confidence in their ability to fill and file their tax returns as compared to only 57.81% of women. 

Expectedly, those making over 75k were significantly more likely to report being confident in their ability to file and fill their tax returns as compared to those making under $30k. Those living in QLD and WA were also more likely to report confidence in their taxation abilities. Contrastingly, South Australians were 20.6% less likely to report confidence in their taxation ability as compared to Western Australians. 

Saving for future:

Overall, 68.59% of respondents reported confidence in their ability to save for the future. 

There is a linear relationship between income levels and confidence in saving, with those earning 125k+ reporting the highest levels of confidence in their ability to save. Within age brackets, no such correlation exists with 18-24 and 45-54 year olds reporting the highest level of confidence in this area. 

On a state by state basis, those living in QLD (70%) and WA (72.64%) are the most likely to report confidence in saving for the future compared to South Australia (59.72%). 

Investing Money:

This area of personal finance was both the one that respondents reported the least confidence in as well as the most varying levels of confidence across demographics. In particular, investing saw the biggest differences in confidence level across gender, income levels and state lines. 

60.79% of men reported some level of confidence in investing, compared to 36.81% of women. 65.63% of those earning 200k+ reported confidence in investing as compared to only 34.62% of those making under $30k. 51.88% of Western Australians reported confidence in investing as compared to only 36% of South Australians. 

The child status and age of a respondent also had an impact on their confidence in investing where parents (51.98%) reported more confidence in investing than those without children (42.53%). 

Interestingly, those aged 45-54 and those aged 18-24 reported the highest percentage of confidence in investing with 55.14% and 55% of their demographics respectively. This likely reflects their tendency for more disposable income to use on investments as those two age groups reported they were also less likely to be solely or jointly responsible for their household bills. Contrastingly, only 42.50% percent of those aged 35-44 reported any confidence in their ability to invest. 

Strategies used: 

Overall, 47% of respondents reported that in order to help them with personal finances, they have sought help from friends and family, followed by 38% reporting seeking help from a professional and 34% reading advice or watching videos from personal finance experts. 

Seeking help from friends and family remains the most prevalent strategy across every single demographic except for those aged over 55+ and those making 200k+ who prefer professional advice. 

Male respondents prefer to seek advice from professionals (42.4%) and from their family and friends (45.6%). Contrastingly, female respondents are also 37% more likely to seek help from their family and friends rather than any other source. 

As for using AI, 16.58% of all respondents reported having already used it for financial decisions. This figure is extremely significant given that chatgpt, used by 80% of respondents, was only launched in November of 2022. 

Interestingly again, there is somewhat of a positive correlation between income levels and AI usage for financial decision making, with 26.57% of those making 125k-199k using AI as compared to 10.69% of those making 30-44k. Parents are also far more likely to use AI for financial decisions (20.55%) as compared to their childless counterparts (12.44%). 

Those living in QLD (18.13%), NSW (17.38%) and WA (16.98%) also use AI more than the average Australian, and far more likely than those who live in SA (13.89%). 

The demographic that is by far the least likely to use AI for financial decisions are those aged 55+ with only 1.5% of that demographic reporting AI usage. 

Ranking of AI compared to other financial tools

Respondents were asked to rank their trust in turning to different strategies including traditional financial institutions, family and friends, social media, communities and A.I for their financial information. 

Interestingly, while seeking the help of family and friends is the most used strategy by most Aussies, most Aussies do not see them as the most trustworthy source of information.

For example, while 66% of 18-24 year olds and 67.57% of  45-54 year olds turn to their inner circles for financial decision making, only 10% and 9.5% respectively ranked this strategy as first on the list of trustworthiness. In fact, over 29% of each demographic, actually ranked turning to their family and friends second last out of all the strategies listed. 

This suggests that they could be turning to their family and friends for emotional support, a lack of resources required to pursue traditional institutions or a lack of knowledge on other alternatives for financial advice. 

Across each category: 

While turning to family & friends and reading advice show high levels of variance, it is because respondents reported these categories highly in the middle range, as compared to use of A.I and social media reported even numbers across each level of trust. This implies that while many people view these strategies as trustworthy, a similar amount view them as untrustworthy. 

Thus whilst many may trust professionals, a similar number do not - with 27.70% of respondents ranking them fifth, 18% ranking A.I advice fifth, and 23.69% ranking advice from communities fifth. 

Openness to using A.I. 

While 18% of all respondents have reported already using AI for financial decisions, a further 30.90% reported planning using it in the near future, and another 28.53% reported not being sure on their stance towards AI for financial decision making. 

Interestingly, openness to using A.I for financial decisions follows similar demographic patterns to those observed in reporting confidence in personal finance. For example, Western Australians, male respondents and those making over 200k+ reported high levels of confidence in managing their finances as well as high levels of usage or willingness to use A.I for financial planning and decision making. Contrastingly, South Australian, childless and female respondents all reported lower levels of confidence in managing different aspects of their finances than their counterparts. These demographics also reported a far higher level of apprehension or uncertainty towards using A.I for financial decisions. 

Amongst those who are unsure: female respondents, those over 55+, those who don't have children, those making between 30k-74k and those living in Victoria report the highest levels of uncertainty towards financial usage of A.I. And, of those who are completely unwilling, those over 55+, female respondents, and those making 30-44k are the most against using A.I for financial advice.

Openness to using A.I differs across categories of personal finance. For example, 73.6% of respondents who previously declared some variant of uncertainty or openness to using AI, reported being willing to use A.I to help set and adjust their household budgets, compared to only 50.97% of respondents reporting willingness to use AI to help fill and file their tax returns. 

Within these figures again, differences also exist between demographics. For example, despite being the areas with the most apprehension, those earning 200k+ have used AI to help fill and file their tax return and invest their money, more so than for any other purpose. Those earning 55+ also reported having used A.I to fill and file their taxes more than any other category, despite having the largest total apprehensive population towards AI usage. 

Women are the most likely to have used & would consider using A.I to help with their saving tendencies, whereas men have used A.I the most with budgeting and investing money and are most likely to consider using it to help with budgeting. Women are the most reluctant to use A.I for help investing money, whereas men have the most reluctance towards using AI for their tax returns. 

On a state by state basis, those living in the most apprehensive state, SA, are more likely to consider AI for help with budgeting, and are far more reluctant to use it for investing money with over 50% of their population reporting reluctance in this area. Contrastingly, WA, the most explorative state, shows the least apprehension towards using A.I for investing with 23.08% having already used it for this purpose and another 47.44% reporting willingness to use. 

What platforms are most used?

Overall, ChatGPT is the most used A.I platform, used by 80% of people. Bing A.I and Gemini are the other used platforms with 38.42% and 36.16% respectively. 

Do you follow the advice given by A.I  & quality of advice 

13.93% of respondents reported using the financial advice given by AI, followed by another 47.08% who reported using partial advice given by A.I. Those who earned 200k+ (25.94%) were the most likely to use all of the advice given by A.I whereas those 55+, those without kids and South Australians, were the most likely to not use the advice they were given. 

The rates of usage - both partial and full - correlates with the perceived quality of advice received by A.I. Most respondents reported using some of the advice given by A.I, which correlates to 42.53% of respondents rate the advice being given a 3 on a scale from 1-5 (5 being the highest). 30.18% of respondents rated the advice either a 1 or a 2, as compared to 27.29% of those rating it a 4 or a 5. 

The quality of advice given by A.I is perceived as far higher by those making 125k+, by men and by those with kids, with 37%, 36.92% and 34.78% respectively reporting the advice as either a 4 or a 5 out of 5 - as compared to the average Aussie of which only 27% rated the advice highly. This disparity could be due to more experience or expertise in leveraging prompts for the specific information requested or a higher level of trust and confidence in the information that is provided by A.I or themselves. 

Western Australians also rank the perceived quality of advice from AI as higher than all other state demographics (33.02%). Only 24.38% of Queenslanders gave A.I advice a 4 or 5, instead the concentration of their answers sits in the middle of the scale. 

Respondent experience with A.I: 

When asked to report on their experiences, prompts and feelings towards A.I for personal finance, the following perceptions were revealed:

Some of the most noteworthy qualitative experiences that capture the range of experience of A.I usage for financial advice include: 

1. “I firstly give it history of my previous spending habits and records of my account. I give it knowledge about me and what my goals are, what level of knowledge is when it comes to finance. I then prompt it to record keeping of my receipts and also to monitor how I spend. I prompted it to invest in a well-known strategy, then something which is high risk, and lastly to look into backing start-ups. My experience after 6 months is mind-blowing; how good it actually is.”

2. "A.I. is great for simple tasks like budgeting or setting savings goals, but I wouldn’t trust it with more complex financial decisions like investments or tax planning."

3. “I was skeptical at first, but after using A.I. to manage my budget, I found it surprisingly accurate and helpful. However, I still cross-check the advice with a human advisor."

4. "I’m interested in using A.I. for financial advice, but I’m really concerned about data privacy. I don’t want my financial information stored or misused."

5. "I tried using A.I. for investment advice, but it felt too generic. It didn’t really understand my personal financial situation."