Pennies To Pounds Podcast

124. Trust the Algorithm: Why Gen Z is Letting AI Handle Their Money (Oh, and we're back!)

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The finance world is being transformed by artificial intelligence, with 73% of Gen Z and millennials now trusting AI more than human financial advisors to manage their money. This episode explores how AI can work for you rather than replace you.

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If you're interested in trying AI-powered financial tools or have questions about which ones might work best for you, DM us @penniestopoundspod for personalised recommendations.

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Speaker 1:

Hey guys, and welcome back to the Pennies to Pounds podcast, the finance show that actually makes sense. If you ever thought, why didn't they teach us this at school? Or how do I get my money up without giving up the things that I love, you're in the right place. We simplify money, expose the myths and give you the playbook to build wealth on your own terms, because money moves fast and it's time that yours kept up. Hello everyone, happy Tuesday. It is today and I hope you have had a great week so far.

Speaker 1:

But it's been a minute, it's been a little while. I wanted to come back and give you guys all a mini return episode where I'm going to explain why we took the break, what you can expect coming up and give you, naturally, an episode for you to listen to, because I've missed podcasting. So, trust me, we took this break for a reason. But first things first. The first difference you'll notice is that intro is extremely different to every single intro we've had over the last five years. Pretty much, I created the Stand the Penalty Spam podcast intro when I made the first ever episode. So this has been a big change for us, a big, big change for us. So why the change. Well, I wanted to switch up the intro to showcase that we're stepping into a new era of the podcast.

Speaker 1:

We took the break initially because number one this podcast has been going for five years. My first ever episode, which you can still scroll back and listen to I was 21, going on 22. I am now not long turned 27. So that is a long time from the first episode to where we are today. It's been an incredible journey. I by no means expected to be podcasting for this long, in the best possible way, because I wasn't sure people were going to be interested in the podcast. So to still be here five years on and still have such a growing number of you every day there's still new people adding this podcast to their library, even during our hiatus says a lot and means the world to myself and the team. But, kia, why the break? Very simple Five years is a long time. Now it hasn't been consistent. I've taken different breaks to really go back, get some new guests and come back.

Speaker 1:

But this break was really intentional because after five years of podcasting you have to take a sit back and if you follow us on social media as well, you will know that we not long ago, announced that we are refreshing how we do things, our approach in terms of the brand, our brand voice, what we want to give to you guys, and it's only right that we do the same with the podcast. So, ultimately, I have been speaking to a few of you who've been listening to the podcast for a very long time, which I truly appreciate, to understand what you love about the podcast and what perhaps you'd love to see in the future, as well as to understand from people what they love about their favourite podcast. Now it's amazing to see we see the Spotify unwrapped every year, that we are the number one podcast for so many of you, but I want to make sure that we stay there and that we are always adapting and giving you the content that you need and want. So, even though this mini return won't debut all of the things that we're changing, it's going to give you a little taster. The aim is that from next week, I'll explain again what changes you can expect and you will have a brand new, refreshed version of the pennies to pounds podcast. All the episodes that have been recorded previously are all still available to stream. We've had some incredible guests on, but going forward, we're going to have a new version tailored to you and what you need our pennies to pounds community.

Speaker 1:

I'm super excited, but I'm more excited to be getting back into podcasting and I thought what should I talk about for the mini return? I'm also doing this solo. As you can tell, I'm by myself and there'll be a lot more of that going forward, because that's how we started the podcast, with solo episodes and guests every so often, because I am an expert in my own right and I love being able to share my information. So for today's episode, I was thinking what can I talk about? And as I was thinking that, I went to one of the tools I use near enough every day chat GBT. So I thought why not talk about AI? Ai is everywhere. You cannot escape it. If you can go a day or two without seeing AI anywhere, you've had a good day because I know, whether it's on my social media, whether it's in the news, ai is everywhere.

Speaker 1:

So I want to talk about AI, but how it relates to finances and our money management. Did you know that, according to data collected by Salesforce in 2024, 73% of Gen Z and millennials say that they trust AI to help them manage their money better than a human advisor, ai to help them manage their money better than a human advisor? This stat shocked me. That is almost three quarters of Gen Z and millennials trusting AI over real life financial advisors investment advisors. So that goes to show how much of an impact AI has on our lives.

Speaker 1:

So, whether you are ready, curious or you're skeptical, you're not sure what AI, what it's going to do for us. You are not alone, but today I want to really break it down and show you how AI can actually work for you and not replace you. What even is AI? So AI stands for artificial intelligence, and the first time that I was introduced to anything robotic AI like probably when I watched iRobots with Will Smith when I was much, much, much younger, and that depiction from what I remember was all these robots who came to take over the world and Will Smith was there trying to fight them all off and save the planet. Over the years in media, we've had so many different depictions of robots, most of them in a negative light, where they start off good, helping us out, whether it's in the household, in the workplace, and then eventually turning on us, whether it's something to do with what humans have done to aggravate them, or a malfunction in their code that makes them evil, wants to hurt us. That is not what AI is Doesn't mean to say that we won't get to a point where we will have robots in the house. That's very commonplace, but right now we're not there.

Speaker 1:

When we talk about AI artificial intelligence we are talking about a program that is there to help to speed up tasks that you may have, and the way I like to think of it is a supercharged digital assistant. Now, when AI, especially open AI so that's the company who created ChatGPT first came out, I was so intrigued. I remember my dad sending me the article. I was like Kia, look at this. And when it said it can just generate a response instantly, I remember logging in, creating an account, and I was skeptical too. I was. I was like, oh my gosh, it's going to steal all my information, it's going to corrupt my computer. But I put in what can I do here? And it generated a response seemingly immediately, with very little thought. Now there is a gap. You'll know whenever you send anything to AI. It does take a little bit of time, but it works super fast. It uses data and patterns to be able to learn, adapt and suggest things that might be smarter for you.

Speaker 1:

Common uses of AI that I think most people, if you have used it before, you might use it for it could be to generate an email to send out to your work colleagues. It could be to write a letter because you need to send an official letter to something. It could be to help schedule out your day, or it could be to put together a fitness routine. The limits for AI? We haven't really found that parameter, but what I have found personally using it is that it's able to speed up the boring, mundane tasks that I just need to do, and for me, that is admin things. So creating emails, writing out emails or writing out things that I have to write a number of times. It helps me with anything that has a lot of repetition in it.

Speaker 1:

Ai is not human. It doesn't have a consciousness, which means it can't think and have emotions. It's not sentient, but what it does do is it processes faster any information you give it faster than any human could process it, and that is one of the pros and why people absolutely love using AI. I want to just kind of go back a little bit AI as you see it. So you might be familiar with chat, gpt if you're an Android user or Google user. You might have heard of Gemini or Copilot if you have Microsoft Teams, for example, for work. Those are the newer versions of AI, but I will guarantee you that most of you listening to this have encountered AI without even realising it.

Speaker 1:

I'll give you an example. If you have a Netflix account, you have encountered AI. How's that? Whenever you watch something? Right? I love documentaries. So if I watch a documentary and I come to the end and Netflix says, hey, you might also like these titles, how does it know what I will like? There isn't someone sat there in a back room saying, right, this is what Kia likes. She's almost at the end. What am I going to suggest to her? That would be a waste of time and you'd have to hire so many people to do that. Instead, what Netflix have done for many years is build an algorithm that is able to learn each of our interests.

Speaker 1:

What do you always go back to watch? What do you never start? What do you start midway and stop, so that every time you come on, you open up the app on your phone, your TV. It's able to suggest what you might like and give you recommendations that you might say huh, actually, that sounds like something I would be interested in. That is AI, another use case that you might have come across. If you have I'm trying not to say the word because my phone is near me if you have Siri, I have to whisper that. If you, I suppose fine. Or you have an Amazon Alexa in your house, the way it's able to generate responses and give you recommendations again uses AI. So there's probably a number of different ways that over the years you have come across AI. It just wasn't as big and as mainstream in conversation as it is now, and it's all down to the fact that open AI pretty much exploded and changed the AI industry as we know it with chat, gpt.

Speaker 1:

But the great thing about that is that it's become more accessible for us to use every day. It's not just for people who understand coding or for people who are deep into the tech world. We can use it for our everyday essentials. You can use it for planning your life, for creating fitness goals and, more importantly, in the topic of this episode, to help you with your money. So how exactly can AI help you with money.

Speaker 1:

There's a number of different ways that it can do that, and some of them, if you have a few of these apps or platforms that I'm going to mention next, you may have already been familiar with. So the first thing is it can help you to budget and make it super simple, because AI can help track your spending in real time. So apps like New Clio and Emma already use AI to analyze your habits and then give you recommendations or give you alerts to let you know where and when you're overspending. And the way you might see this manifest itself is through nudges where it might say hey, looks like you spent more on eating out this month or hey, you actually spent more in this category in the last week rather than this. Do you want to kind of rein it in? Spend less? Should we readjust your budget? All of these things which you might think are really great and really just help you with your money is all down to algorithms created by these apps to help you to master your budgeting. A way that you might have come across is help you to save smarter and also invest better. So we're going to saving element.

Speaker 1:

The first time I'd ever heard an app use AI was with Plum. Now, if you are an avid pennies-a-pounds follower or listener, you will know that I have been singing the praises of Plum since pretty much pennies-a-pounds started. We are not affiliated with them. This is not an ad Genuinely. I love the app and I use it myself for my own personal finances.

Speaker 1:

The tagline and the way that they promoted themselves was saying that they utilize AI to track your spending so similar to like the apps we just mentioned. But they monitor your spending. So they say right. Usually for about the first week you sign up to Plum, nothing happens. No saving or investment happens. It's just watching how you spend. And then the second week is when it actually starts to save for you, and what you'll find is that it tailors the amount that goes away each week in savings based on how you are currently spending your money.

Speaker 1:

So if you have a week where you spend more, it will save less because it's like, oh, we've got to adapt it to your spending habits. And if there's a week where you're at home, for example, when you spend way less, it will save more. And the beauty of this and the reason why I love Plum is that you never really see the money go, and that's been one of their things. You never see the money go from your account, but they do that because they tailor it to your lifestyle. If you spent more one week and now Plum is coming for a big chunk of change to put into your savings and investments, you'll be like whoa, whoa, whoa, I'm gonna stop this completely. I'm gonna stop saving and investing. So instead of doing that, they just amend how much goes away each week, so AI can help you to automate your savings based on your behaviour.

Speaker 1:

Another way that they can also do it is to do things like rounding up your purchases, which is what I love. I love turning on roundups. On any app bank that I have, I turn on roundups, and roundups is basically when you go out. Let's say, you bought a coffee and the coffee is £2.54. If you have roundups turned on, it will round your purchase up to the nearest pound, which would be £3, meaning that it will save 46 pence for me into my savings account. Now, that is a pretty simple and easy way to give your savings a boost without even realising it. If I was really spending £2.54, putting away the difference isn't really going to break the bank for me. I'm not really going to see it go and you can turn that on. Some apps also allow you to 2x, 3x, 5x, even 10x those roundups, so you can get an even bigger boost to your savings. And a lot of these apps also help you to build tailored plans around savings and investments, which I'm going to come to in a second, because I know that sometimes you can sit down and say, right, I really want to save, but coming together with that plan if you don't really have that help, can feel very like oh my gosh, this is long, I'm not going to achieve it. So AI can really help with that.

Speaker 1:

If we take it to the investment part now, if you've got so, if you already invest through one of these digital platforms, for example, like Wealthify, free Trade, nutmeg, moneybox, you go through and you pick an investment fund, if that's how you're investing, and what you'll see is some of these funds usually are managed by someone, so you have to pay a management fee every year because that is paying the bank or whoever who is in charge of putting the investments in that fund and tracking those investments and making changes when needed. You pay a management fee in the form of a percentage every year to that. What you may see is that some of the management is actually robo-advisors. What is a robo-advisor? What does that mean? Is there a robot sat behind a computer that's there watching my investments for me and making the changes? All that is again is just smart algorithms and making use of AI when it comes to creating those smart investment decisions on your behalf. Now, the reason why it's great is because these algorithms can make quick changes. They can detect even small fluctuations in the market and make changes.

Speaker 1:

Us as humans. If we're not there to make immediate changes, we might miss it, whereas these algorithms can act almost immediately to course correct and make the changes for your finances. And then the last thing that AI can do to help you with your money is to help you to financially plan without the jargon. So AI, like we are, we do similar things in the sense that it can help to make complex money decisions feel much simpler, and the way that they'll do this is they'll break it down in plain English it makes it feel more accessible, more relatable and something that you can actually approach yourself. So AI has a lot of potentials, and I think that's just going to grow over time as AI becomes more developed as we understand it more and the coding becomes better for these platforms.

Speaker 1:

However, I recognise and I've spoken to a lot of people, a lot of people who are in their 20s and 30s who have told me you know what, kia, I'm scared of AI. So let's talk about the fears, because they're absolutely valid and I completely understand it. Some of the common ones that I hear. First one AI will take over my finances and I won't understand a thing. Valid fear, completely understand. But I think once we position AI and we understand that it is an assistant, a co-pilot, something to help you and not completely take over, then you can understand its role with your money and your finances Because, in reality, you are still very much in control of your money. Ai just brings you options, not commands, so you can utilize it. You can take the options that it gives you. You can say, actually, that doesn't fit me, I'm not going to use that one, or yes, let's go ahead with with that, but you are still very much in control. The next one that I hear quite a lot is that AI makes mistakes and it does. It absolutely does. So what if it gives me the wrong advice?

Speaker 1:

I have used AI, probably for the last almost three years now, chat gbt, and over that time my use of it has gone up. So I went from using it on occasions because I couldn't really see how it fit into my life to now using it near enough daily. I genuinely have ChatGPT. You know, on my iPhone where you have your four apps at the bottom, one of the apps now is ChatGPT. That is how often I use the app, because I use it and I it really does.

Speaker 1:

That is why, whenever you're using it for things especially for financial guidance, financial tips the biggest thing that I can recommend is to make sure that you're not using it as your sole source of information. So I'll use it as a starting block. I don't mind it and it's really useful for generating text. If I need a copy for this, if I need it to write out this, if I'm using it for research, I will use it as one of the sources because it's good at scouring the internet and pulling together resources. But what I'll always do, regardless of what it says, is I'll always double check the information myself. Don't ever just use AI solely with no double checking. You need to always make sure that you're going and checking the data that it gives you and looking at verified sources for the information that it recommends to you.

Speaker 1:

Ai isn't perfect but, like I said, it can be a really good starting point. It is a great way to aid and assist in you making better financial decisions. And the last one, which 100% I hear from majority of people as their reservation as to whether or not they should use AI, is that they're not techie. So a lot of this stuff feels intimidating, and I completely get it, because it can feel like a lot. There's a lot of words being used, a lot of tech, a lot of jargon. This has always been my thing. Obviously, around finance there's so much jargon, so the everyday person, you feel excluded from it. But tech is a whole nother level. If you don't understand what they're talking about, you are locked out of the conversation. But what I will say is that there are a lot of tools that have made it easier. I've gone through some of them, but ChatGPT, number one, just works as a chat box and when you're there and you're on the platform, all you need to do is tell it what you want it to do. Do you want to generate a letter for you? Do you want it to go through your essay and correct the grammar. Tell it what you want it to do and it'll perform that task for you. The same thing with Gemini. I also know that Apple have got their AI, apple Intelligence. All of these things are there to help you out.

Speaker 1:

One of my favorite use cases for AI as well is to take down meeting notes. Oh my gosh, that is the biggest lifesaver. Whenever I have a call with someone, I want to focus on the call. I want to really give value in that call that I'm on, but I don't want to sit there and take notes, because when you're taking notes, you're missing things or you're having to pause the conversation so you can remember what you're writing down. If you have AI there, it can take down all the notes that you need so I can focus on that conversation and then go back through it afterwards. Just start small. You don't have to feel overwhelmed. There are so many great use cases for it, but the more familiar that you get with it, the more confident that you can feel. You don't have to go full reliance on AI overnight. That's what we're talking about. We're just understanding what AI can do for your money and how it can really help you.

Speaker 1:

Here are some beginner-friendly tools that I personally use that I would also recommend you to have a look at when it comes to money management that also incorporates AI. First one is Clio. So Clio is a budgeting app that works almost like a chat box, so it will ask you questions or prompt you, you give your information and it'll help you to budget, but it can be very sassy, very fun and it's a great beginner chatbot for anyone who is looking to get used to AI but hasn't used it before for your money. Next one is Nou, so that's N-O-U-S, which means we in French. This is a great way it helps you with your bills. So what it will do is it will connect up, look for all your bills and then give you recommendations on where you can cut back, and you can make those switches directly within the app that are near enough immediate so you can kind of switch providers if you need to, and it really sits up to date with those recommendations. Really good app have a look at.

Speaker 1:

It would be wrong if I didn't mention one of my favorite apps of all time that I use all the time plum and that, like I said earlier, automates your saving and investments based on your income and spending, absolutely love it, and in us pennies to pounds we have a few AI tools. So the first one I would highly recommend for beginners is to have a look at our money coach AI and that I completely programmed it with all of our information. So if at any point, you have a question that you would pose to us, whether it's in the DMs, whether it's via email you can ask the money coach. You can ask the money coach and what it'll do is it'll give you information, it will give you guidance, it will give you tips and also point you in the right direction to potential articles or resources that we may have in-house that could suit you and your question and needs.

Speaker 1:

Where, where is all of this AI stuff going? Is it really going to be here? Is it going to be part of our lifestyle? Are we going to have those robots that I mentioned in the beginning living in our house? Well, the reality is that, like I said, ai is here, but it's only going to get more powerful, more personal and more every day, which is why I really want to encourage you to get comfortable with AI and get comfortable with how you can use it in your money management, as always, if you're using things like ChatGBT or our Money Coach AI, never give any personal information. So we're not talking about writing in a chat function. How much you earn, that's fine. You know how much you spend in different categories, that's fine. Your savings goals, the debt you want to pay off, absolutely fine. But never give personal, sensitive information like your full name, date of birth, place you were born or place you live, sort codes, all the things that you would never give to a website. That seems a bit sketchy. You should also follow that same practice for AI, but outside of that giving numbers, giving approximates, giving estimates to be able to get information back it can be really, really useful.

Speaker 1:

I see this AI boom similar to that of when the internet was created. Now, I was definitely way too young for that right. I don't think I was born when the internet came out, but from hearing it from my dad and how it revolutionized everything, I think that is what AI is going to do for this generation, and we saw the people who were early adopters of the internet. The people who embraced the internet, learned how it worked, how they could utilize it, were the ones who did really well, whether it was building businesses or just being successful in their own personal lives. I think this is where we need to get to and get familiar with when it comes to AI, and that is what we're building towards, and I am actually very happy and very proud to say that pennies to pounds is definitely going to be a part of it and guiding you along that way to feel comfortable, to understand the changes and what it means for you and your money. I should also point here that if you follow me, as in Kia, personally on social media, you will know that I have mentioned that I am building a fintech app, so this will be separate to pennies to pounds, but adjacent, and it will be AI powered to help you to really master your money. I'm super excited, so, if you're interested in that journey, I'm sharing a lot more of that on my personal page. I was recently in Austria at a tech conference and I'll be going to America next month with regards to building this app, so it's going to be really exciting. I'll be coming to everyone listening for feedback and you can be early adopters and early users, because I want to build it with you all in mind, but that is AI for money management.

Speaker 1:

So, to wrap up and conclude what we've mentioned throughout this episode, if you've been feeling overwhelmed by money, then I would say don't ignore AI. Explore it, see how it can help you feel more confident and less overwhelmed when it comes to your money. You don't need to be a tech expert to benefit and use AI. You just need to be curious and open to trying it. Whatever preconceived notions, whatever you believe about AI, leave it at the door and give it a try for yourself, and we'll be right here, showing you how you can use it, giving you the information so that it all makes sense and you feel confident, so you can implement it in your real life. If you're ready to get started, some of the apps and the tools that we mentioned will be in the episode description, so make sure you go and check it out. If you want a personal recommendation, dm us on pennies to pounds, that's, at pennies to pounds pod and we'll give you a personal recommendation based on what platforms, what apps you might want to have a look at for your money, because I know it can feel overwhelming more than happy to do that for our loyal listeners.

Speaker 1:

Episodes are coming. They're going to be great. They're going to be super duper exciting. So make sure you are locked in, tell our friends, tell a friend because it's going to be a great return. And, lastly, welcome back. Welcome back to the penance podcast. I hope you've enjoyed this episode. Thank you so much for supporting and we'll be back again next week with another episode. Bye, guys.