Introduction
I have seen many clients for whom financial management was a big issue. I often meet clients whose impulsive spending means they have no savings, or have to borrow money from family. Having no savings means no ability to afford large assets like a house. People with ADHD may take years longer to acquire assets, which can reduce the amount of money they have in retirement. I have another blog post about the Kiwisaver scheme potentially saving a group of ADHD people who otherwise would step into retirement (if they can afford to retire) with no savings, and having to live on whatever pension is available at the time.
Talking about budgets and planning and having to curtail impulsive purchases is not fun, but it may be necessary for some to be able to pursue their life goals of being financially independent and secure. I have seen clients make plans for financial management, and mostly stick to them, with a resultant sense of pride and a reduction in anxiety about previously poor financial management.
Other than impulsive spending, there are other drains on finances, including ordering in food rather than engaging in the executive function challenge that is meal planning, shopping for groceries, and then initiating cooking tasks. That of course leads to dishes that need cleaning. Cooking is not an easy task, and spending on takeaway food and snacks can really burn through money. Then there's the ADHD tax - which refers to interest bearing payment plans, penalty fees, and subscriptions that sap money but require executive functioning skills to notice, cancel, and then manage in an ongoing fashion.
Procrastination can mean that financial planning is put off for the future. ADHD can make people very focused on short-term goals, and anything decades away can feel very unimportant. Unfortunately, starting to save early allows for the benefit of compounding interest and market returns - things you cannot make up for if these plans are procrastinated for years on end.
So, what can be done? Thankfully, there are options.
Practical Strategies for Financial Management
Automate Finances: Set up automatic payments for bills and automatic transfers to savings accounts to ensure timely payments and consistent saving.
Use Budgeting Apps: Leverage technology to track spending. Apps that categorise expenses and send alerts can be particularly helpful. There are so many to chose from.
Simplify Financial Accounts: Consolidate bank accounts and credit cards to reduce complexity and make monitoring easier. Alternatively, your brain might work better with multiple accounts each with a named purpose, so that your position is easier to see from a glance.
Establish a Routine: Set aside regular times to review finances, pay bills, and plan for the week ahead. This sounds incredibly boring, but I've heard good things about this strategy from clients in relationships.
Limit Impulse Spending: Implement a waiting period for non-essential purchases (leave them in your online cart) and allocate a specific budget for discretionary spending. Then resist the urge to dip into savings, or make them inaccessible using some of the tips below. Often people notice that online shopping happens in the evening during "me time" and when their meds have worn off for the day. If this is the case for you, try to impose some rules about how you will view and act when on these websites. Maybe delay purchases until the next day when your meds are on board.
Make it Harder to Access Some Funds: Ask your bank if they have bank accounts that you can't access via internet banking. An account like this could be used as a savings account. There are also some savings accounts that penalise with a fee or a reduced interest rate if money is withdrawn; but this will not be a big enough disincentive for some. Some of my clients keep money in the account of a trusted family member or partner. They have to ask for permission to access this money, sometimes with the other person able to veto or delay payment if the purchase seems impulsive or unwise. This won't work for everyone, and you really need a person you can trust your money with.
Seek Professional Advice: Consider consulting with a financial advisor who can help devise a plan for savings, and how to manage your accounts. Make sure you describe your issues with money management.
Use Cash for Daily Expenses: Having a tangible limit on daily spending can help manage daily expenses more effectively for some people. But I've also heard others who say that physical cash is easier to impulsively spend, or to lose.
Set Clear Financial Goals: Break down larger goals into smaller, achievable steps to maintain motivation and focus.
Hire an Accountant if You Have a Business: I've had many clients who have big problems with managing finances for their business, including penalties for late GST returns, or even big tax bills, and disorganisation about keeping records of expenses and income. I always strongly recommend hiring an accountant, or if you're a sole trader, using the Hnry service, which has received some good reviews from my ADHD clients.
Conclusion
Managing finances can be a complex task for anyone, but for adults with ADHD, it can be a really difficult task. As with everything, an individual plan is what is needed, and a multi-pronged approach is the most likely to work. But the satisfaction that can come with reducing impulsive spending, and building savings (let along reducing finance-related animosity within a relationship) can really be worth it.
There is a LOT written online about managing finances with ADHD. Below are just a few snippets:
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