With inflation soaring and the cost of living increasing at every turn, it’s already hard enough to keep on top of expenses and manage money effectively. For neurodivergent individuals, conditions like ADHD can be yet another barrier to effective financial planning.
So, if you have ADHD and feel like you’re struggling more than your peers, you’re not alone. ADHD complicates finances on many levels. However, for young people, this condition affects executive function skills.
Executive Function Skills & ADHD
Executive function skills are some of the most important cognitive processes that a person uses throughout the day, and they help regulate and control time management, organization, self-control, and planning. These are all crucial skills when budgeting, but ADHD consistently interferes with them.
In fact, ADHD is fundamentally an issue of executive function. For people with ADHD, impulsivity, attentiveness, emotional regulation, and memory are constantly in flux. These are among the core attributes of strong executive function, leaving people with ADHD with shakier building blocks than the average neurotypical person.
Executive function skills can be built up and strengthened through practice, so by adulthood, most people with executive dysfunction have the tools they need to function in a demanding environment. However, these skills aren’t always fully developed in young adults, leaving them at higher risk of struggling with money management and facing financial insecurity.
How Does Struggling With Executive Function Skills Lead to Mismanaging Money?
ADHD and money management are natural enemies. Budgeting is an intrinsically long-term-oriented activity, and it functions best with consistency and frequent close attention. On the other hand, ADHD can cause impulsivity, a short-term orientation, and shorter bursts of focus and interest. When something goes wrong financially, it can be easier to ignore it than to incorporate it into the budget and adjust the long-term plan.
People with ADHD are also more likely than others to make spur-of-the-moment purchases and spend emotionally. These characteristics can make it difficult to nail down a safe spending budget, and without an accurate idea of both cash inflow and cash outflow, it’s nearly impossible to make a functional, helpful budget.
Finally, issues with timeliness, planning, and task initiation are common among people with ADHD. This can make seemingly simple activities, such as paying bills or moving money from one account to another seem nearly insurmountable, leading to issues like overdue payments and overdraft fees. Individually, these may be only minor nuisances, but they can add up quickly and cause serious financial strife.
3 Tips for Managing Money With ADHD
While all of the above might make it seem like ADHD and money management are mutually exclusive concepts, that is not the case. Yes, budgeting with ADHD may be budgeting on hard mode, but you can find ways to make your brain’s tendencies work in your favor rather than trying to work against them. Here are a few tips that might work for you.
1. Start Small
First, before you begin budgeting, figure out how much money you gain every month and how much money you spend. This takes time, and there isn’t always a way to take a shortcut. Start by calculating your earnings each month. Then, examine bank statements and credit card bills to see how much money you’ve spent each month for the last few months.
Include all monthly expenses, such as rent and student loan payments, as well as impulse purchases and food. Then, take your average monthly income and subtract your average monthly expenses. The resulting number represents your disposable income.
2. Organize the Way Your Brain Prefers.
You know best how to organize information that your brain prefers above all other methods. Use your preferred method to organize your spending into categories so that you can understand where your money is going each month and how much goes into each category.
Jam jar organizing is a fan favorite and works by separating each spending category into a discrete unit, then allocating a specific amount of money to that category and keeping it separate from your other money. Some people use actual jam jars and put a predetermined amount of money into each of the fancy coffee, cool knick knacks, and grocery jars. You could also just separate money into different bank accounts.
However you decide to allocate your funds, make sure you do it in a way that feels natural and helpful. Once your money is separated this way, it becomes easier to see exactly how and where you’re spending money, as well as when you’re running low on money in a specific category.
3. Use a Calendar
Overdue bills and extra fees can be backbreaking. Avoid them at all costs. Use a calendar, phone notifications, sticky notes, or whatever other media you need to set reminders for crucial days throughout the month when credit card, energy, rent, and other payments are due.