Many people have difficulty managing their finances, and ADHD doesn’t make this task any easier. If this sounds like you, you’re not alone: 4% of adults have ADHD. Luckily, there are many ways you can protect and save your hard-earned cash.
ADHD and Your Wallet
Research shows that young adults with ADHD often struggle to manage money. That’s because ADHD can cause procrastination, disorganization, and impulsivity. These traits aren’t harmful in themselves, but they can make it difficult to manage money. Here are some tips to help with each one as they impact your finances.
Nipping Procrastination in the Bud
Break finances into smaller tasks. Large projects can feel especially overwhelming for people with ADHD. Make a list of all the finance-related tasks you need to complete. When possible, break them into smaller tasks, like checking a balance and then paying a bill. Cross each item off your to-do list as you finish it. You can color code each item to remember its priority.
Prioritize important payments. If you can, pay credit cards, rent, student loans, car loans, and housing expenses at the beginning of the month. If not, schedule a second bill review date later in the month. If you use paper copies, write “PAID” and the date on the bill itself to help keep track of which bills you’ve taken care of.
Set up auto-pay. Most companies let you pay your bills electronically with automatic monthly payments. Schedule these payments for times when you know you’ll have money in the bank, like payday. Sign up to receive phone or email notifications whenever a bill is paid. Use these notifications as reminders to review the bill and make sure the charges are accurate.
Stick to a schedule. Choose one day and time each week to work on your finances. Making finances a regular part of your schedule can help you avoid procrastination.
Plan ahead by starting small. Open a savings account. Use a setting in your bank account to automatically set aside a few dollars from each paycheck. If you set the amount deposited as a percentage, the amount will increase as your income does. Just $25 per 2-week paycheck adds up to $650 in annual savings before interest.
Dealing With Disorganization
Keep track of your spending habits. Write down everything you buy and its cost in a notebook or log it in a smartphone app. Set up regular reminders on your phone to log your purchases. You also can set up purchase notifications on your credit card app, which will help you remember to log those items too. Compare your notes with someone you trust, like a spouse or close friend, to make sure you’re not missing anything. Look for patterns to see where you’re spending the most money and where you can save.
Visualize your budget. Use a free budgeting tool like Mint.com to track your budget visually. First, you’ll input your financial information. Then, the app will divide your spending into preset categories and self-set categories that you create, such as dining. You can then see if you’re getting close to going over your budget overall and spending in colorful charts.
Other ways to visualize your budget are to set reminders for payments and spending in calendars and create a financial goals collage. The collage would include pictures of items you’d like to save for such as a home, car, or vacation. Fill in a thermometer-style graph to keep track of your progress.
Simplify your bills. You will receive a bill each month for every credit card you own. Consider canceling all but one card. That way, you don’t have to juggle so many bills each month.
Do your bills in a quiet place. Kids, pets, and social media can create irresistible distractions for people with ADHD. Set up a private space for working on your finances. Keep your desk clean and free of distractions, including your cell phone. Strategies like using a white noise machine, playing soft music, or fidgeting with a pen or other small object can help you stay focused.
Cut back on paper. For some people with ADHD, managing paper files can be difficult. To avoid paper clutter, try signing up for online bills. Save bills into folders that you can easily search by keyword. Try organizing your finances with apps or online programs instead of folders or binders. Online banking and direct deposit also can be helpful.
Give everything its own space. Pick a shoebox, filing cabinet, or folder on your password-protected computer to store all your financial documents. Wherever the place is, make sure it is safe and secure. Keeping files organized will help you when it’s time to review them or pay your taxes.
Get a money manager. Credit unions generally offer free financial counseling. Counselors offer help with everything from daily and weekly budgets to setting long-term savings and investment goals. Employers also might offer financial wellness programs. If possible, find an advisor who has experience with clients who have ADHD.
Avoid the impulse. Try to avoid situations where you’re likely to buy things on impulse, whether that’s the mall, flea market, or your favorite online retailer. Think about whether you are more likely to give in to impulse buys online or in the store, and choose the shopping style that best protects your wallet. Unsubscribe from email lists for stores you tend to overspend in.
Plan for the impulse. When you need to buy something, plan ahead by making a shopping list. You can use an online price guide to help with budgeting. Share your shopping list with a trusted friend or family member, and ask them to check in with you during or after your shopping trip. When you go to the store, take only the money you need for the items on your list. You also can try taking a budget-conscious friend on your shopping trip.
Limit the impulse. Credit cards make it easy to spend money impulsively. If you have access to cash, use that instead of relying on your credit card. Try withdrawing a set amount of cash for weekly spending. Meanwhile, you can store your credit cards in a safe, difficult-to-reach place. You might consider asking a trusted partner or friend to hold onto them.
Put a sticker or write a savings goal on your credit card. This sticker will remind you of your financial goals – vacation, a new wardrobe, a special gift – every time you use your credit card. Stopping to think about this goal might help you to manage impulsivity in the moment.
Another way to fight the urge to spend quickly is to give yourself a “cooling off” period. Before making a big purchase, set a timer for 24 hours. When the timer goes off, you can decide whether you still want the item.