Generative artificial intelligence (referred to as “GenAI”, or “AI”) is more than just a tech headline – it’s reshaping how law students and new lawyers are making money decisions as they budget for bar prep, repay student loans, and choose between public and private careers.
While AI is making financial information more accessible than ever, with people utilizing GenAI models for everything from basic budgeting to investing and taxes, its prevalence raises important questions. How and when do we use AI in the decision-making process? How should it augment, but not replace human support? And can we trust the information we receive for some of life’s biggest decisions?
Using AI at the beginning of the decision-making process, not the end
It’s widely known that AI models aren’t always 100% accurate. They can lag real-time data and events and must be prompted to ask exploratory questions about your specific situation (which may give you pause) in order to arrive at more nuanced outputs. They also crucially lack the empathetic, emotional intelligence of an experienced professional.
That said, AI models have become far more capable. Today’s models can:
- Summarize complex financial topics in plain language;
- Compare repayment and refinancing options using recent or real-time data;
- Simulate multiple budget or career scenarios;
- Help develop frameworks or planning tools to crunch your own numbers; and
- Act as “agents” at the core of a more complex system to track data and automate certain processes.
AI can effectively summarize complex topics, generate rough projections instantly, or run various scenarios to give you a clear starting point for deeper analysis.
Think of your decision-making process as a funnel. At the top, you gather all relevant information and perspectives – this is where AI models excel, helping you process and organize vast amounts of data. The next step, professional verification, is critical. Review and enrich AI-generated insights with human judgment, contextual understanding, and additional details, drawing on trusted, expert sources like AccessLex.org. Together, these layers create a more informed, reliable, and responsible decision-making process.
AI outputs, explained?
But how do you know if AI outputs are accurate (or even unbiased) enough to include at the top of your decision funnel? Some of the biggest questions in AI today ask how certain outputs are produced and by which sources. This complex process has encouraged the movement for explainable AI (XAI), which seeks to make complex AI models more transparent and accountable by showing how they arrive at certain outcomes. This is obviously critical in financial decision-making, which is heavily dependent on accurate data, numbers, assumptions, regulations, and real-world economic trends. The good news is that XAI already has uptake with some financial institutions and tech companies. Lenders using XAI to justify automated credit approvals and denials, fraud and money laundering detection, and algorithmic trading and investor risk assessment are a few common applications. You can also use tried-and-true financial modeling tools managed by experts, like the AccessLex Student Loan Calculator, to confirm vital details of your AI inquiry.
Best practices for asking AI financial questions
Using the newest generations of AI tools across various platforms, you can tackle common scenarios and their underlying financial questions in seconds. Common questions posed to models span from managing cashflow to investing, with high-level prompts like:
- Budgeting: “Create a monthly budget for a law student in Boston with $2,000 in income and average expenses for rent, food, and transportation.”
- Loan Strategy: “Compare the total costs of the Repayment Assistance Plan (RAP) vs. the Income-Based Repayment (IBR) plan for $180,000 in federal student loans at 8% interest.”
- Career Moves: “Estimate relocation and bar-exam costs for a recent grad moving from Florida to New York, and suggest ways to save for them.”
- Wealth-Building: “Show how contributing 6% to a 401(k) starting at an $85,000 salary compounds over 30 years with a 7% annual return.”
Notice that these example prompts request ballpark figures without disclosing any personal information. This “asking for a friend” approach can allow you to include general income ranges, debt figures, time horizons, and goals, without attributing them to your specific situation. Never input account numbers or other personally identifiable information like your Social Security number or date of birth. Law students can increase their own familiarity with financial topics – enabling them to generate more helpful information, through free, online financial education resources like MAX by AccessLex®.
Using AI wisely: A quick checklist
- Define your goal (e.g., I’m researching the benefits and drawbacks of refinancing my federal student loans).
- Manage your privacy settings before beginning (e.g., opt out of using prompts for training purposes).
- Provide context based on your comfort level.
- Do not share personally identifiable information you wouldn’t post online.
- Ask for multiple scenarios. Best case, worst case, and middle ground.
- Define how you would like the AI to respond (e.g., “Explain this like I’m a first-year law student.”)
- Ask for sources, then verify them.
- Confirm with a professional. Don’t act solely on AI output.
Verify, verify, verify
As stated, AI tools are impressive, but they still make mistakes – sometimes so confidently that it’s hard for us to spot inaccuracies.
So, before you act on financial information:
- Cross-check key facts on official sources like gov, IRS.gov, FTC.gov, or Investor.gov.
- Ask the AI to cite sources.
- Check time relevance to ensure the model has timely information.
- Always use human confirmation – like free coaching calls with Accredited Financial Counselors through AccessConnex by AccessLexSM – for big financial moves. If something sounds too optimistic (or too grim), always double check before you act.
The bottom line
AI won’t replace sound financial judgment, but it can make learning and comparing options much easier. Used wisely, it’s a tool that empowers you to understand your finances and clarify your goals. Explore, verify, and discuss with human advisers. Done right, AI can be a powerful tool on your path to financial capability – from 1L year to professional practice and beyond.
For more information on how AccessLex Institute is empowering the next generation of lawyers with free tools, resources, and programming – including the award-winning MAX by AccessLex® financial education program – visit AccessLex.org.
This post is sponsored by AccessLex Institute.
Derek Brainard, CFP, AFC, CRPC, is the director of financial education at AccessLex Institute.
