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For years, I wondered why I had nothing to show financially for years of working, and I couldn’t seem to get a handle on money. I didn’t consider how my brain works as a factor until I was diagnosed with ADHD later in life. I thought I was terrible with money all those years of living paycheck-to-paycheck, making short-sighted decisions, and racking up debt.
Managing money can seem daunting for adults in general, and ADHD compounds that. Common traits of Attention Deficit Hyperactivity Disorder, like focusing, starting tasks, forgetfulness, and impulsivity, make it even more challenging.
Here are 10 tips for developing financial stability while having ADHD.
1. Think about what you want the money to do
Before diving into the numbers, consider the kind of life you want if money is not an obstacle. Remember this as you look at where your money is going and whether it supports what you genuinely value. You can even start to consider saving money by outsourcing things you don’t care to do or add significant struggles to your daily life while having ADHD.
2. Break it down
Nine times out of 10, if I am procrastinating, the task needs to be broken down enough for me to take any action on it. Don’t try to overhaul your finances in one shot. If you are calculating your net worth, inventory what you own one day and what you owe on another. This strategy helps limit procrastination by making tasks more manageable.
3. Find out where your money is going
Knowing where your money is going is crucial to improving cash flow, and it can be challenging to keep track with an ADHD brain. You get paid and have no clue what happens to your money each month. Start with identifying the expenses that recur each month. Then, look at variable spending for insight. This will help when creating a monthly budget and identifying any categories you want to give extra attention to.
4. Rethink how you define budgeting and keep it simple
The word budget is like nails on a chalkboard for many. A spreadsheet may even come to mind when you hear it. Call it something that speaks to what you value or are working to save toward instead. If taking trips is important to you, call it a World Traveler Plan.
Automation is your friend when you have ADHD, and your bank account(s) can do most of the heavy lifting so you can avoid missed payments and late fees. Ensure you understand your income’s timing and when the withdrawals occur to avoid overdrafting.
If your company allows, you can separate your direct deposit into multiple bank accounts designated for specific spending like:
Checking Account 1: Bills/Fixed Expenses
Checking Account 2: Variable Spending
Savings Account 1: Emergency Fund
Savings Account 2: Sinking Fund/Goal Savings
The 50-30-20 is a simple way to allocate your funds:
50% to things you must pay.
30% to things you want to pay for.
20% to debts and savings.
More ways to create a budget that works for you can be found here.
5. Another perspective on impulsive spending
The term impulse spending comes up a lot in the personal finance arena. I heard a talk on finances and ADHD where the speaker said something along the lines that the perceived impulse buy might be a solution for managing the challenges of ADHD. This freed me and made me think of how many purchases I made to “fix my life.”
For example, I was struggling to drink water, so I bought one of those fancy half-gallon bottles with motivational words for the times listed on the bottle. The excitement wore off after a few days. After letting it collect dust for several months, I threw it in the garbage. I later found completing a smaller bottle multiple times daily more manageable.
Pause and think about how the possible solution will benefit you and whether it fits your lifestyle. Create an “oops” line in your budget to account for these purchases to lessen the impact of an unplanned purchase on your budget.
6. Make spending difficult
Swiping cards and online shopping provide a dopamine hit. Consider removing your stored card information for the online shops you frequent, so purchasing on the fly is more difficult.
When possible, use cash to manage money and control spending money. Cash is harder to part with than swiping because it doesn’t activate the reward centers in the brain.
7. Plan for the unexpected
Life will life. Something will come up that you didn’t plan for. Create an emergency fund. The general rule of thumb is 3-6 months of expenses, but you can start with $500-$1,000 to keep from needing to borrow money when an emergency expense arises.
8. Make it visual
Keep visual reminders around to keep it top of mind and motivated about the financial goal you are working towards. This can look like a chart where you mark your progress toward the goal and/or a picture of it. Or a smartphone app with goal-tracking features if you are into technology.
9. Celebrate wins
No matter how big or small, celebrate your wins. You can have a major celebration when you hit a large goal, but to stay motivated on the journey, celebrate the milestones towards them. For example, if you have an emergency savings goal or plan to make a big purchase that would take a year, celebrate each month that you hit the monthly target.
10. Support is necessary
Whether it’s a trusted friend/family member, a financial professional, a financial advisor, a therapist, or a group chat, get support from others. Having someone in your corner willing to work alongside you as you work toward your financial goals increases your chances of achieving them.
It is possible to have ADHD and learn money management with the right resources and support to help you unravel the mystery of your finances. When money is no longer a big looming unknown, time and mental space are freed up to devote to other things you find exciting or fulfilling. And remember to be kind to yourself on the journey.
I encourage you to face money management and financial matters head-on and learn what works for you and supports the life you want to live.