I Asked ChatGPT To Explain How To Create a Budget Like I’m 12 — Here’s What It Said

Personal finance experts can have a lot of advice when it comes to budgets. But when you boil it right down, a budget is really just making sure you don’t spend more than you make. For some, that’s easily done without a budget. For the rest of us, not so much.

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So GOBankingRates asked ChatGPT to explain how to create a budget to a 12-year-old. To see how ChatGPT’s advice stacked up to advice from personal finance experts, its responses were compared with a recent article by personal finance expert Rachel Cruze, who co-authored the bestselling “Smart Money Smart Kids” with her father, finance guru Dave Ramsey.

Here’s what they said about how to create a budget.

When asked how to make a budget with easy steps, here’s what ChatGPT advised: “Know how much money you have. First, figure out how much money you get. This could be from your allowance, birthday gifts, or a part-time job like babysitting or mowing lawns.”

It then gave them example of getting $10 per week from doing chores around the house.

Cruze’s advice was similar, with her first step being list your income. Of course, her numbers were larger, assuming an income of $8,100 per month.

Cruze also gave advice on situations in which you don’t make a steady income each month, suggesting you look back at the last few months and use the lowest amount as a baseline. Better safe than sorry.

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ChatGPT’s next step was listing your needs and wants. “Needs are things you have to pay for (like saving for a school trip or buying lunch). Wants are extra fun things (like toys, video games, or candy),” it explained.

It gave the example of a 12-year-old saving $5 a week for a school field trip as a need and saving up to buy a new video game as a want.

Cruze’s next step was was listing expenses. She provided more detail and broke categories down into giving, saving, the four walls and all other monthly expenses.

Next, ChatGPT advised coming up with a plan to divide your money. It suggested dividing it into categories like saving, spending and giving. This would likely fall in line with Cruze’s advice from Step 2.

Cruze’s Step 3, alternatively, was to subtract expenses from income. So there’s math involved. Sorry, 12-year-olds.

“Keep track! Write down what you earn and what you spend. You can use a notebook, a phone app or even a jar system — different jars for spend, save and give,” ChatGPT advised.

On this, ChatGPT and Cruze agree again, but Cruze provided detailed advice. She said that the only way to enjoy success with your budget is to stay vigilant through a few key steps.

She advised staying accountable to yourself by tracking every single expense. She also said that it’s important to stay accountable to your significant other or spouse. We will forgive ChatGPT for leaving that out for the 12-year-old.

Cruze advised avoiding overspending and staying on top of your budget in real time. She also advised watching your budget as you go so you know how much you have left in the monthly budget for each category.

Finally, ChatGPT advised keeping track and making adjustments to your budget as needed. “Every few weeks, look at how you’re doing. If you don’t have enough saved, you might need to spend a little less on fun stuff for a while,” it said.

Cruze’s fifth step is similar: “Make a new budget before the month begins.” Basically, use what you’ve learned each month to tweak your budget, as each month, she explained, will likely be different.

You also might need to adjust budgets for special occasions or seasonally. For instance, a big birthday month, Christmas or a vacation could necessitate a major change in your budget.

The bottom line is that both ChatGPT and Cruze champion a budget for the same reason: worry-free peace of mind — kind of like if you were 12 again.

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This article originally appeared on GOBankingRates.com: I Asked ChatGPT To Explain How To Create a Budget Like I’m 12 — Here’s What It Said