AI Budgeting, Understanding CPI, & Late Starter Investing 😎

July 9, 2024

Good morning, HTM family!

In the word “can’t” is can.
In the word “don’t” is do.
In the word “won’t” is won.
And in the word “impossible” is I’m possible.

Once you figure out your possible, you can break through any barrier, any border, there’s no limits.

And you’ll live life how you want to live it. Instead of life living you.”

–Pitbull

Alright, let’s get to the money stuff
 👇👇👇

TO DO

Cook Something at Home 👹‍🍳

https://giphy.com/gifs/onechicago-pd8wYFcDcGjduYhnOc

Challenge this week: Prepare a *new* homemade meal you’ve never cooked before. You can try one of these popular summer recipes, or try to replicate a delicious restaurant meal you love.

Bonus points if you double the recipe and save leftovers for another meal. Your savings will stretch even further. đŸ’Ș

TOOLS

Using AI to Help with Finances đŸ€–

My grandparents used a simple pen and paper budgeting system (which still works great for them today!). So you definitely don’t need fancy tools and apps to manage finances well.

That being said, it’s way more efficient when your banking apps and platforms talk to each other and get smarter over time. Better yet, when these apps “learn” from your actions and make smart recommendations based on your personal situation, things can get really easy!

He are a few examples of how AI can help with your personal finances…

Chatbots: Personally, I’ve found Chat GPT or Gemini most helpful when asking for quick, tailored advice or to get ideas on how to attack money-related tasks better. For example, you can ask a chatbot this:

  • “Create a cheap 5 day meal plan”. Then, follow up with
 “list all the ingredients I need to buy for this plan”.
  • “I’m trying to negotiate XYZ bill. Can you create a script I can use when calling customer service?”
  • “I need help writing a cover letter for my resume. Here are 3 main points i want to get across: x, y, z”

The more you use chatbots, the better you get at prompting, and the more relevant the outcome. Just don’t ask for investing advice — Chatbots cannot predict the stock market!

Budgeting Apps: Copilot is a cool budgeting tool that uses AI to help categorize transactions, which gets smarter over time the more you use it. Monarch is another top budgeting app that uses AI to give you more personalized advice. You can ask it questions and it can help you set goals or gain insights to your money at a deeper level.

Robo-Advisors: Some use advanced AI, others are more basic. But the main goal of robo-advisors (like Betterment and Wealthfront) is to offer automated investing so there are fewer manual tasks on your end. They create portfolios based on your specific financial goals and risk tolerance, and use sophisticated algorithms to rebalance and keep the portfolio aligned with your long-term objectives.

Credit Monitoring: Services like Credit Karma and Experian Boost use AI to analyze your credit report, pick up trends with transactions and then provide personalized tips on how to improve your credit score. They can also monitor the “dark web” and alert you to any suspicious activity or data breaches you should be aware of. **A quick warning: Many of the “tips” these apps provide are actually just ads to sell you other products. Be careful not to sign up for crap you don’t need!

Debt Payoff Help: One of the best tools we love is Undebt.it, which helps you create a custom debt payoff plan based on your specific loan details. You can also compare different payoff strategies (eg. snowball v. avalanche) and see how that affects the end result.

“AI” is a bit of a buzzword… In the broadest sense, it just means intelligence exhibited by computers. If you can use apps and tech to better manage your finances, great! If you’ve got everything handled and your manual systems ain’t broken — no need to let newfangled AI tools attempt to fix it!

More stuff:

  • đŸ“Č Copilot Free Trial: Check out Copilot here, and use promo code HOWTOMONEY for a free 2-month trial.

  • 🩋 Mint —> Monarch: Monarch Money is offering 50% off its 1-year subscription with code MINT50.

TOGETHER WITH BETTERMENT*

Turn out the lights on traditional savings accounts. With our high-yield cash account, your money is earning 11x the national average**. Get started today

INFLATION

Understanding CPI đŸ€”

Found this interesting chart from Axios. It’s based on a survey of ~2,200 American’s who were asked about their understanding of inflation.

While economists (and raw CPI data) measure inflation as the YoY change in prices, most people think of inflation as a multi-year, cumulative increase in costs👇👇👇

And this totally makes sense!


Because even when inflation is technically “going down” (the rate is lower than last year), this doesn’t mean prices are dropping. In fact, prices are still going up! But just not at as fast of a rate as before.

Shifting perspective a little: Instead of viewing inflation as a relentless adversary, with the right mindset and strategies in place, it doesn’t have to be a source of anxiety or stress.

It’s OK that prices constantly increase, as long as you:

  • Don’t hoard cash
  • Keep investing in appreciating assets
  • Budget realistically each year and account for increases
  • Continually push yourself to increase your take-home pay
  • Always reevaluate expenses and audit where you spend money

All in all, inflation is a constant force, we’ve just been more keenly aware of and impacted by it in recent years. But the good news is there are a lot of things in your control that can soften the blow, or even help you pull a jiu jitsu move on inflation, using it to your financial advantage.

Related stuff:

ICYMI

In other news


Woof 🐕‍đŸŠș
Apparently ~2 in 5 Americans say their pets inspire good money habits. Kind of random, but hey, we’re in favor of whatever gets people to save more!!

PTO đŸïž
Expedia’s latest Annual Vacation Deprivation Report shows American’s take the least amount of vacation days worldwide. USE YOUR PTO folks!!! You worked hard and earned it —> now it’s time to enjoy it!

Skills đŸ’â€â™€ïž
Great post from Morgan Housel about some of the most Useful and Overlooked Skills one can have.

Savings GroupsÂ đŸ€‘
In South Korea, it’s common for friends to form what are known as “gyemoim”, which are savings groups to put money away for vacations, meals and other social activities. Let’s adopt that here so we can hit our money goals together!

SL Forgiveness 👹‍🎓
The SAVE Plan is in limbo. Even if your payments have been paused, it’s a good idea to keep setting aside money towards your loan balance and don’t assume forgiveness or reduced payments until it’s 100% certain.

COMMUNITY

It’s NEVER Too Late đŸ«”

Here’s an inspiring story from our awesome Facebook community 👇

What I love about this story is it proves that people don’t know what they’re truly capable of until they get started.

Saving for retirement might seem impossible for you based on your current situation… But you CAN do it. As overwhelming as things might seem, when you begin putting away money and seeing your pile grow slowly, your mindset will change. Results will come → but only after you commit and take action.

It is NEVER too late to start saving!

Cheers for reading, and wishing y’all a beautiful week ahead! 😎

Best friends out! đŸ»

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