How AI can help you create a monthly budget

Microsoft 365 Life Hacks > Budgeting > How AI can help you create a monthly budget

March 29, 2024

Developing a recurring budget is one of the most direct ways to take control of your finances, but it can be an intimidating task to set up, much less manage. Enter AI tools, which can help you make a monthly budget and oversee your spending habits. See how an AI-driven monthly budget helper can offer recommendations to help you achieve your financial goals.

How AI can help you create a monthly budget – Microsoft 365 (1)

Why use AI to manage your budget?

AI budgeting tools can connect to your bank or credit card account, which allows it to analyze your financial data accurately and efficiently. By using sophisticated algorithms to get a snapshot of your financial situation, highly accurate AI tools can offer suggestions for your spending and identify potential opportunities for savings. Here are some other ways that AI can help you save time as well as money:

Automating mundane data entry tasks

Creating a monthly budget traditionally involves hours of manual work that can involve tracking down receipts, manually inputting data into spreadsheets, categorizing transactions, and trying to predict future expenses. But through AI, the manual process of data entry can be easily automated by category, recurring expense, or the occasional indulgence. Many AI budgeting tools can go through your financial statements and automatically identify merchants by category, such as picking up on the business names of restaurants and coffee shops, for example.

Personalized insights and recommendations

By visualizing your spending by category, you can quickly note where to cut down on expenses. However, one of the key benefits of AI budgeting is its ability to provide personalized insights and recommendations. Here, you can set your own goals to cut down on manageable spending, while receiving suggestions on how to optimize your budget. This ensures that your budget reflects your unique financial situation and goals.

How AI can help you create a monthly budget – Microsoft 365 (2)

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Real-time tracking and spending alerts

AI budgeting tools offer real-time tracking of your expenses, providing instant visibility. This helps you stay on top of your spending, avoid overspending, and make informed financial decisions. Set up alerts to receive notifications when you approach or exceed your budget limits, empowering you to stay in control of your finances.

Predictive analysis for future planning

AI utilizes predictive algorithms based on your historical spending habits to better anticipate future expenses and income. This feature helps you plan for upcoming financial obligations, such as bills, subscriptions, or irregular expenses, ensuring that your budget remains realistic and adaptable. For example, if you switch to a more expensive internet plan or use more heat in the colder seasons, a monthly budgeting helper can adjust for this and identify other avenues in which to save. Crucially, if there’s a major life change such as moving to a city that has a different cost of living, your entire budget can be reconfigured to match—without requiring you to start from scratch.