How ADHD Makes Managing Finances Difficult

ADHD brains are wired differently than neurotypical ones. The prefrontal cortex is one of the main areas of the brain affected by ADHD. This leads to trouble with executive functioning skills, such as organization, planning, concentration, decision making, working memory, and time management. 

These effects on the brain drive many of the ADHD behaviors that people with the disorder struggle with. Due to the nature of money management, reduced executive function can lead to a number of financial problems, such as:

  • Forgetting to pay bills on time
  • Difficulty with budgeting and saving
  • Losing track of cash, checks, bills, or important financial documents

In addition, the thalamus is less effective in someone with ADHD, which leads to a lower level of impulse control. When temptations arise, people with ADHD may be less likely to think through the consequences and make an informed decision. Instead, they may act on impulse whenever they have a sudden desire. This is one of the reasons why people with ADHD sometimes struggle with impulsive shopping, which can wreak havoc on their finances.  

Outcomes of Mishandling Money with ADHD

What happens when someone with ADHD isn't managing their finances well? The results depend on each person's individual circumstances, but the effects can be serious.

Forgetting to pay bills can result in everything from temporarily having your water shut off to defaulting on your mortgage and losing your home. Failing to set aside money in savings can lead to panic when an unexpected expense comes up, like a car repair or hospital bill. Impulsive shopping can drive someone deep into debt, which is even harder to crawl out of if you already struggle with managing your money. Excess debt could also cause your credit score to plummet.

Unfortunately, the shame and stress surrounding these issues can negatively affect someone's mental health. If the problem becomes too big, they may feel paralyzed by how overwhelming it is and avoid it entirely, which only worsens things. Furthermore, money problems can lead to relationship problems, like arguing with a partner about money problems.

If you have financial issues, acknowledging them is the first step. From there, it's important to take the matter seriously and develop a strategy for getting your money under control. The better grasp you have on handling your finances, the less time you'll spend worrying about money.

Tips for ADHD Money Management

Fortunately, there are several ADHD-friendly strategies which can help you stay on top of your finances. Here are some of the top tips to keep in mind when thinking about the best way to manage your money.

Set up autopayments

Say goodbye to the late fees forever by setting up automatic payments for all of your bills. Taking the guesswork out of when to pay each one is one of the most helpful money management steps for someone with ADHD. It eliminates the need to remember to write a check or go into your online accounts to pay each month, which frees up your mind for other things.

Declutter your documents

Set aside some time to organize the documents you have. Do it in small batches to make the task more approachable. Then, go paperless for as many of those documents as possible. If you've set up autopayments as advised above, you don't need to worry about receiving a paper bill each month. Instead of dealing with the overwhelming clutter of financial documents, you can access your statements and bills online as needed.

Carry cash to shop

One of the best ways to curb your excessive or impulsive spending is to only bring along as much cash as you want to spend. This isn't just for fun purchases like clothing, games, or books. You can use the same tactic for grocery shopping and other practical needs. Carrying cash is a budgeting trick that keeps your spending in line since you have a hard limit on how much money you have access to. 

Reward yourself for saving

ADHD brains feature lower levels of dopamine, which reduces motivation. But giving yourself rewards can boost the dopamine that your brain craves and keep you motivated to do a specific task. This is a useful strategy for saving money when you have ADHD. Every time you deposit a certain amount into your savings account or retirement account, give yourself a reward for completing the task. It could be enjoying a sweet treat, playing a video game, or watching an episode of your favorite TV show. The only rule to follow when creating your reward system is that it shouldn't involve spending more money since that will detract from your financial goals.

Are you ready to tackle your finances and manage your money more effectively? In addition to using these tips, remember that having a good ADHD treatment plan in place is another vital tool for financial success. The more you're able to keep your ADHD symptoms under control, the less those symptoms will interfere with your ability to manage your money effectively. To learn more about your treatment options, reach out to us at Done.