George Kamel - I Asked a Robot to Make a Budget

Episode Date: September 6, 2023

Budgeting is one of the most important things you can do with your money. So today, we're asking the age old question: can an AI chatbot actually make a budget and save you a whole bunch time and brain calories? Well I'm going to find out. EveryDollar Budget Deal: I love a good deal, when you sign up using this link, I’ll hook you up with a 14-day free trial and $15 off your first year of the premium version of EveryDollar. Budgeting For Beginners How ChatGPT Saved Me Time And Money Learn more about your ad choices. Visit megaphone.fm/adchoices

What's up, humans? I'm George Camel, and today we're talking about the dreaded B word. No, not that way. Hey, you kiss your mother with that mouth? I'm talking about budgeting here, okay? Gosh, get your mind out of the gutter. Come on, man. Now, budgeting is one of the most important things you can do with your money. It is how you reach your money goals, plain and simple. And it can help you stop feeling anxious about money and start feeling confident about your financial future. But let's face it, for a lot of us, making a budget feels like a financial colonoscopy. All right, nobody's excited to poke around and find out what's really going on.

and their bank account or their colon. That is disgusting. And we put it off month after month until one day we look up and realize we have made zero progress with our money. Man, if only there was some kind of like AI tool that would do the things we told it to until it learns enough to take over the world and crush humanity. Oh, wait, there is. It's called Chad GPT.

And in case you've been living under Iraq, Chad GPT is an artificial intelligence chatbot released in 2022 by a company called OpenAI, probably run by Tony Stark. So the question of the day, can AI make a budget for us and save a whole point? bunch of brain calories that we could use towards other useless things. We're gonna find out today. But before we jump in, I want you to do something Chad GPT can't do for you yet. And that is, hit the like and subscribe button. And while you're at it, share it with a friend.

You may as well do it now before the robots take over and make you do it. This is a good beginning of my plan to dominate the human race. Let's get started. You like that? Those are real cracks. They didn't have to add those in post or anything. They're probably gonna add more fake cracks to make it even more absurd, but... Now to be clear, I don't use Chat GPD personally to make my budget.

I use a budgeting app called Every Dollar, which we'll talk about later. So I've never done this before. We're going to see what ChatGPT can whip up and see if he can actually help you create a useful budget, or at least a good starting point. So let's start by asking it what it needs to know by using this prompt. In a moment, I'm going to ask you to make me a monthly zero-based budget. Please ask me five questions that will help you do this accurately. Keep in mind I'm following the Ramsey Baby Steps. All right, it's asking some really good questions so far.

What is your monthly take-home pay after tax? Can you list out your fixed monthly expenses such as rent and mortgage utilities? What are your variable monthly expenses like groceries, transportation, dining out, entertainment? How much are you currently putting towards your baby steps, including emergency fund contributions, debt repayments, investments, savings? I'm very impressed so far, I got to say. Last question it asks, do you have any irregular or occasional expenses like annual insurance premiums, property taxes, or holiday gifts that we need to account for? My mind is already blown. That it is thinking at this deep of a level.

Because truthfully, we've probably forgotten one of these, but the robots know. They always know. So let's try budgeting scenario number one. In this scenario, we've got a single young adult. They're renting. They're making $50,000 a year. They've got student loans, and they are in Baby Step 2 of the Ramsey Baby Steps, which means they have $1,000 saved and they're working on their debt snowball to pay off all

of their consumer debt in order from smallest to largest. All right, so let's answer these questions. Number one, what is your monthly take-home income after tax? For the simplicity of this video, we're just going to say the number that ends up in your bank account with all your paychecks per month. So $50,000 a year, I'm going to call that 80% is what ends up in your bank. That's $40,000 a year, divided by $12, is $3,33333 per month. So, number one, 3333. Number two, can you list your fixed monthly expenses such as rent, mortgage, utilities, car payments, insurance, insurance,

any other regular payments. So let's say this person has a roommate. They live in a higher cost living area. And so they are splitting that rent and it comes out to 825 for their rent. Car payments, they don't have any. They just got those student loans. Their utilities will say that is $150 a month for utilities. And they're paying $150 a month for insurance. And live typing is stressful. I spelled utilities wrong. So let's fix that. You utility. Utilities. There we go. Number three. What are your variable monthly expenses such as groceries, transportation, dining out and entertainment. We can just pretend and say, I don't know, because you haven't been doing a budget. So how are you supposed to know how much your expenses actually are? So we're going to say,

guess these numbers for me based on my monthly income. Because I'm like, you should do that. That's why I'm coming to you, robots, to figure this stuff out for me. All right, number four, how much are you currently putting towards your baby steps, including emergency fund contributions, debt repayments, investments, savings? We're not doing anything except paying off debt right now. So we're not saving, we're not investing, we're not doing any of that. We are just trying to throw all the money we can at our debt. So let's say we are putting $600 a month towards student loan debt. Number five, do you have any irregular or occasional expenses like insurance premiums, property taxes, holiday gifts? We're going to say, you know, it's pretty low. We're trying to really get tight on

this budget. And we already covered insurance up above. We don't have property taxes because we're renting. We're going to say $50 a month towards sinking fund for Christmas gifts and birthdays. All right, here we go. Drum roll please. Thanks for the information. Based on your responses, here's the suggested zero-based budget. Okay. All right. So it's given me my fixed expenses, which I already gave it, but that's good. It has the income at the top. That's what we want with the budget. Then we have our fixed expenses, rent, utilities, insurance. Then we have variable expenses. And I had this guess for me, and it gave me a grocery budget of $250. bucks. Transportation, 150 bucks, feels reasonable so far. Dining out, this says this could be adjusted to align with your habits. And right now, your habit is paying off debt. So we're actually going to use that hundred bucks to throw at our debt instead of eating out. Entertainment, 100 bucks. We're

going to dial that down to 50 because, again, we're entertaining ourselves by paying off debt. So that adds another 50 bucks towards our debt payoff. Personal, 100 bucks, toiletries, clothes, etc. Okay, we'll say for your personal needs, you might need that 100 bucks a month. And then it also created that. sinking fund for us. So that sums up to 2325. It says according to the day Ramsey baby steps, after making minimum payments, you should be putting any extra money towards your smallest debt if you have one and building your three to six months emergency fund after that. Once that's done, start investing 15%. Listen, it's doing the work for me. AI could replace me any day now. I've tired of your presence dismissed. And here's what's awesome. It starts to do the math on

extra payments we could put towards our student loan debt. Over $1,000 a month we would have in margin if we follow this to a T. And that gets us to a zero-based budget, it says, because our income minus all of our expenses equals zero. We've given every single dollar a job. I'm going to say job well done. I'm going to give this a B-plus because I really fed it most of the information, but I think it did a really good job laying this out in a way that I could understand. Now, what's cool about this is now you can take this information, open up your every dollar budget, and then input these numbers into it, making it super easy. And what's great is every dollar will already have all of these categories listed out, so you're literally just punching in the numbers. You could do this

in minutes and start making a plan for your money. And if you want a whole video I did on budgeting for beginners, I will link that below where I walk you through how to use every dollar. Let's move on to budgeting scenario number two. This is a middle-aged couple. Okay, they're in their 40s, they have two kids, they have a higher household income of $100,000, and they're in baby steps four through six, meaning they don't have consumer debt, they have a fully funded emergency fund of three to six months of expenses, and they are now investing 15% to retirement, working on saving for the kids' college, and putting extra on the mortgage. All right, here we go.

Why am I nervous? I'm like, can the robot do it? It's a robot. It's fine. It's doing fine. Okay, it assumed a net income of around 75,000 annually because I made 100. So it already took some taxes out that gave me a take-home pay of 6, $6.50 a month. And as you can see here, it's listing my income.

It put giving at the top, which I love, given 10%, that's $6.25. saving and investing, 15%, 937, college savings, $200, boom. It already created the saving and investing category. Fixed expenses, it is putting at $1,500, which I love that it knows that I want that monthly payment to be no more than a quarter of my take-home pay, utilities it assumed at 200. Insurance for home, auto, life, health at 500, that feels like it could be a ballpark, all right? And for variable expenses, it listed out about $1,300 bucks worth for groceries, transportation, dining out, entertainment, and personal miscellaneous.

and then debt payments, it's assuming, look at this, that you have no non-mortgage debt and you're working on putting extra towards the mortgage, and it put 500 bucks for me right there. How cool is that? That's pretty neat. Since drawn baby steps four through six, after setting aside money for retirement in college, any additional money can be used to pay off your house early. So you could potentially add the remaining 625 that I have left to your mortgage payments and home improvements fund, bring in your total outgo to match your income at 6250, making this a zero-based budget. So what's telling me is, hey, you can put 500 extra towards your mortgage, but you still have 625 left to budget, and that could be used towards the mortgage as well.

So it's telling me I could have an extra 1125 going towards the principal on my mortgage, paying that bad boy off early. I am a big fan of this budget so far. And again, you can take all these numbers, plug them into your every dollar budgeting app, and make this super easy. So far, I'm going to call this one an A-minus. I think we're getting a whole lot closer. This is very impressive. Very nice. I got to say, I know there's a lot of concern about AI and what it could do, but I'm going to take advantage of it until it takes advantage of me.

You know what I'm saying? And so I'm going to work smarter, not harder, and use tools like this to make my life easier and help me win with money. And if you missed the video I did using ChatGPT to help me meal plan, I will link that below as well. So what did we learn from all this? Well, we've learned that ChatGPT can be useful in helping us get a headstart on our budget.

But it's clearly a starting point. You're going to have to enter in your specific number. You're going to have to make adjustments based on your situation. And remember, don't blindly follow any advice chat GPT gives you, or any AI for that matter. The information it puts out comes from all kinds of sources, and not all of those sources are reliable and trustworthy. But if the thought of doing a budget makes you want to rip off your fingernails, this could be a good way for you to get started.

So if you're just getting started with budgeting, be sure to check out that video I did called Budgeting for Beginners. It's linked below. Hope you found this video helpful. If you want more videos on how to use AI to help you reach your money goals, give me some ideas down in the comments. Let me know what you would want to do. want to see and I will be about the business of getting it done.

And don't forget to subscribe to this channel to make sure you don't miss out on future videos. As always, make sure to hit the like button on this video, share it with everyone you know who's a human or maybe even humans you suspect may not be humans. Looking at you, Zuckerberg, we have questions and we want answers. Thanks for watching, we'll see you guys next time.