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\n \u00a9GOBankingRates <\/p>\n
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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> ChatGPT, the popular artificial intelligence (AI) bot, sometimes takes criticism for providing erroneous calculations or generic information. But when it comes to outlining the worst things you can do with your money, the AI is spot-on<\/a>.<\/p>\n I asked ChatGPT this very question to see what advice it might give someone making this common search query, and the answers it gave surprised me. They read just like the recommendations a professional financial advisor might give clients who are beginning their financial lives. In other words, this information, while perhaps basic for advanced investors, is the type of knowledge that should be part of a financial literacy course for all Americans. <\/p>\n Here\u2019s what ChatGPT had to say about the worst things you can do with your money<\/a>.<\/p>\n<\/p>\n Let It Sit Idle (Too Long)<\/p>\n ChatGPT rightly points out that if you\u2019re not earning an investment return on your money, its purchasing power can fall dramatically. As the AI bot says, \u201cOver 10 years, 3% inflation can shrink your money\u2019s value<\/a> by nearly 30%.\u201d <\/p>\n To avoid this, you\u2019ll want to keep large sums invested, rather than in low- or no-interest checking accounts or, even worse, under your mattress.<\/p>\n Chase \u2018Hot\u2019 Trends Without Understanding Them<\/p>\n One of the easiest ways to lose money in all markets is to jump into \u201chot\u201d areas just because their prices are going up. If you don\u2019t know what you\u2019re doing, it\u2019s all but inevitable that you\u2019ll be one of the ones left holding the bag when the party ends. <\/p>\n As ChatGPT puts it, you should \u201cavoid jumping into crypto, meme stocks, NFTs or AI play just because they\u2019re trendy\u2026.Hype cycles create bubbles. You often buy high and panic-sell low, compounding losses.\u201d<\/p>\n Carry High-Interest Credit Card Debt<\/p>\n This is a financial killer that should be common knowledge; unfortunately, Americans still carry credit card balances to the tune of $1.18 trillion, according to the Federal Reserve Bank of New York. The worst part isn\u2019t even the going-into-debt part \u2014 it\u2019s \u201cpaying 20%-plus interest while making minimum payments,\u201d as ChatGPT says. \u201cCompound interest<\/a> works against you. A $5,000 balance can cost you thousands more over time \u2014 for nothing gained.\u201d<\/p>\n<\/p>\n Buy More House Than You Can Afford<\/p>\n Homes in the U.S. are at near-record levels of unaffordability, and this is pushing some buyers to pay more than they can afford. ChatGPT points out that this is a bad strategy because \u201cit locks up cash, increases risk in downturns and may leave you \u2018house poor<\/a>\u2018 and unable to save or invest.\u201d <\/p>\n As the bot rightfully points out, if you tie up all your money in a house you can\u2019t really afford, you risk going into debt if you no longer have the cash flow to pay your bills. You also divert money away from your long-term savings and investment plans.<\/p>\n Treat the Stock Market Like a Casino<\/p>\n Although the daily ups and downs of the stock market can make it feel like gambling, it\u2019s actually not \u2014 unless you treat it that way by day trading<\/a>. While long-term investors tend to fare very well, day traders, especially those without experience, are setting themselves up for failure. <\/p>\n ChatGPT notes that \u201cthe odds are heavily against retail traders. Most lose money. Investing is not gambling \u2014 but it becomes gambling when you don\u2019t have a plan.\u201d<\/p>\n Ignore Emergency Savings<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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