An AI-Powered Personal Finance Assistant: Enhancing Financial Literacy and Management

Managing finances can be daunting due to the complex financial landscape, lack of financial literacy, and difficulty tracking expenses or budgeting. Existing tools often need more personalization, rely on static budgeting, and provide generic investment advice. To address these limitations and enhance financial literacy and management, this paper proposes the development of an AI-powered personal finance assistant. The proposed assistant will utilize machine learning and natural language processing to provide a comprehensive financial overview, personalized insights and recommendations, and educational content tailored to users’ needs. Key features include automated expense tracking, customized budgeting aligned with income and spending patterns, tailored investment advice based on risk appetite and goals, and proactive notifications about significant financial events. The methodology involves leveraging a robust technology stack (React.js, Flask, MongoDB, Firebase) to enable these features. Qualitative and quantitative evaluations will be conducted to ensure the assistant’s effectiveness, ease of use, and utility, including focus groups, usability assessments, and longitudinal studies across diverse demographics. Specific metrics for evaluation will include improvements in financial literacy measured by pre-and post-use tests, quality of financial decision-making, user satisfaction scores, task completion rates, feature utilization, and user engagement levels. The expected outcomes include improved financial acumen, optimal financial decision-making, achievement of monetary goals, and secured financial futures for users. Extensive literature review and preliminary prototyping validate the proposed solution’s potential to address current limitations in personal finance tools. The assistant will incorporate robust data encryption, personalized educational content, and design considerations around user contexts to address security and generalizability concerns. By delivering a secure, intelligent, and comprehensive platform, the assistant aims to empower users to manage all aspects of their finances effectively, ultimately transforming financial literacy and management practices.