Would you trust a chatbot with your money?

Welcome to MoneyNerd!

Anna here. It’s been a busy week on the economy beat, with a flurry of new data and headlines to sort through. These developments stood out to me. 

Gas prices continue creeping up: Average gas prices are hovering around $4 a gallon after weeks of upticks. Brent crude, the international benchmark for oil, topped $100 a barrel last week as reciprocal strikes between the U.S. and Iran intensified. President Donald Trump declared a pause on Friday, July 24, which sent oil prices down around $90 a barrel. But alas, peace proved temporary once again. After Iran launched some surprise strikes earlier this week, Trump declared, “They’re going to get a beating.” On Wednesday, the U.S. followed through, launching retaliatory strikes. Oil prices soon spiked and gas prices will likely continue to follow suit as uncertainty remains.  

Food and gas prices top consumer concerns. When gas prices started falling in June, consumer attitudes started to rally — the vibes were improving! But Tuesday’s Consumer Confidence Survey by The Conference Board reflects a more pessimistic view of prices and the job market, according to write-ins from those surveyed. Data showed the index fell 1.4 points to 90.8 compared to 92.2 in June — the vibes are bleak once again. 

Fed Chair Warsh is keeping his lips sealed on rates. At this week’s Fed meeting, the Central Bank kept rates unchanged at 3.50% to 3.75%. The decision was not unanimous, however, with three FOMC members pushing for a quarter-point increase rather than holding rates steady. 

The meeting was Kevin Warsh’s second as chair of the Federal Reserve and he’s been forthcoming about, well, not being forthcoming with “forward guidance” on the direction the Fed will take next. He said the idea is to let markets do more of the reacting as new economic data comes in, rather than having the Fed signal where it’s headed next. 

For what it’s worth, the futures markets CME Group FedWatch tool shows that rate hikes are likely at the remaining three meetings of the year in September, October and December. 

The economy is slowing — but not everywhere. The latest gross domestic product (GDP) numbers showed a much slower second quarter (+1.5%) compared to the first quarter (2.1%). Consumer spending fueled the majority of growth, offsetting weaker contributions like federal spending. One important thing to note: The overall GDP wasn’t strong, but a measure of “core” GDP that only includes consumer spending and private business investment grew by 3.9% in Q2 compared to 1.7% in Q1 — that’s a significant uptick and signals the economy might not be dragging the way the headline number suggests. 

Tariffs may cost Americans $1,100 annually. Last week the Trump administration announced global tariffs ranging from 10% to 12.5%. The White House is sticking with tariffs even as energy costs rise, signaling it’s willing to accept potential inflation spikes at home. Updated projections by the Yale Budget Lab show current tariff policies are expected to raise overall consumer prices by 0.7%, with the average U.S. household expected to pay $1,100 more per year. 

That’s the rundown. Now here’s what’s in this week’s MoneyNerd: 

- Erin El Issa, senior data studies producer

More than a quarter of Americans (26%) are using AI chatbots to find answers to personal finance questions, according to a new NerdWallet survey. Savvy or short-sighted? As with most things, it depends.

The survey found that of Americans who have acted on personal finance advice provided by an AI chatbot, about 3 in 10 (29%) say it hurt their financial situation, but another 39% say it helped their financial situation. (For the remaining 32%, it had no impact.)

Some Nerdy advice on using AI to your financial advantage, rather than relying on it to run your wallet:

Read on below to see what happened when we tested a chatbot’s financial advice.

- Kim Palmer, personal finance expert

When I asked ChatGPT to help me figure out how much to save for college for my three children, I got an answer I wasn’t expecting.

It told me that I needed to save far more than I could realistically funnel away: $8,000 a month.

The chatbot made that calculation based on the astronomical cost of college and the fact that I hope to send multiple children through four-year institutions. But what it wasn’t considering is that my budget also faces multiple other demands, and my kids might go to a lower-cost public university. 

After I refined my request with follow-up questions, ChatGPT offered me a more realistic but still out-of-reach savings plan of a few thousand dollars a month. 

While I still don’t plan to follow that advice exactly, my interaction with the AI chatbot did open up a helpful conversation with my husband. We agreed we needed to find a way to save more than we had been previously. 

ChatGPT helped us get the discussion started, even if its advice was missing some key context about our lives. 

That’s why financial experts often recommend using a hybrid approach when it comes to relying on AI chatbots for personal finance guidance. You might want to use the tool to generate ideas, understand terms and brainstorm, but it helps to run suggestions past friends, family or a financial professional before acting on them.

- Tommy Tindall, personal finance writer

I sometimes dream about being my own boss. I could go the gig work route. Freelance marketing, maybe? I’d land clients on platforms like Fiverr or Upwork, build websites and manage social content for small businesses, and enjoy the freedom to recharge with an afternoon nap. 

It would be the tops, I tell ya … until tax time.  

Also, I wonder how steady my income would be just relying on freelance websites to find work.

Would I make enough to pay my most pressing bills … and save for a rainy day?

How much are healthcare plans, btw? I’d probably need an IRA eventually, too. 

Self-employment sounds like a lot of math, actually. 

I don’t want to take the wind out of your entrepreneurial sails. I mean, flexibility, freedom and bosslessness are beautiful things. And in this economy, gig work may be your most promising option. It’s just that surviving (and thriving) on fluctuating income takes a lot of planning and saving.

I asked real freelancers for advice on how to budget with irregular income.

Thanks for being a subscriber! We have five quick questions, and your answers will help shape where we take MoneyNerd from here.

In the news segment of this week's Smart Money podcast, senior news writer Anna Helhoski talks to host Sean Pyles about the boom in data centers — and why many communities are pushing back.

Check out the episode below.

Adults are outspending children on toys for the first time — and people are saying "this generation refuses to grow up."

The real story? Adulthood got expensive, and nostalgic spending filled the void.

Your MoneyNerd team: Courtney Neidel, Anna Helhoski, Rick VanderKnyff and Lauren Schwahn.

Was this newsletter forwarded to you? Subscribe here.

See all of NerdWallet’s newsletters here.