Many of those affected by ADHD have impulsivity issues. Combining impulsivity and money is a dangerous mix. I have heard stories of spouses with ADHD going out on their general errands for the day and coming home with a new car unexpectedly without any input from their partner, just a spur of the moment acquisition.
We think my Dad might have had ADHD. We don’t know for sure but before I was born my parents moved to Washington DC from New York and my dad went out and bought a house without really consulting my mom. The house was probably a great investment if they had been able to keep it but it was completely impractical for their needs at the time. So they ended up selling it fairly quickly.
One could argue that it would have been a great investment on paper but the house didn’t fit their lifestyle realities. For example, my father had polio that affected one of his legs. The house he bought had a spiral staircase that was difficult for him to get up and down. Furthermore, there was no way he could have carried my brother, who was a baby, up and down those stairs safely.
I find that many of us with ADHD can make impulsive financial decisions that can appear smart but in practicality are not. We also are great at arguing why the expenditure was smart afterwards.
Many of my clients when they start working with me, are deeply in debt, mostly with their credit cards. Some go to extremes to solve their credit card problems by cutting up their credit cards or freezing them in a block of ice in the freezer. The idea being that they have to wait for the ice to melt before they can get to their credit card and that time delay will stop them from being impulsive.
I don’t support these methods for a couple of reasons. First off, you don’t need your physical credit card to buy things now on the internet or by phone. Second, slowly many places are stopping taking cash like automated parking garages. In addition, such methods can cause inconvenience in other ways.
So what to do? How can those affected by ADHD manage their money in spite of their impulsivity?
I believe in setting rules and assumptions that slow you down or make you pause. For example, maybe you set a limit how much you can charge on your credit card in the moment. Meaning, for example, you can’t spend more than $100 in the moment. That you have to walk away and come back to it after say 24 hours before you can act on any expense over $100.
This pause in behavior can be helpful because it can get in the way of the impulsivity energy high you might feel in the moment to buy or spend. It also gives you time to run the idea by someone else and get their input.
Another rule may be that once you get your paycheck, the first thing you do is pay the bills from it before the money goes into your general spending account. That includes paying off a set amount of debt.
Another rule could be that you never let the debt go over a certain amount – an amount that is below your credit limit. It can also be helpful to make sure you look at how much interest you are paying each month and not allow yourself to ignore that number. It is just throwing money away.
I have found it very helpful to automatically have money deposited where it is not easily accessible monthly to build up an emergency fund or savings account. When I worked for a non-profit right out of college I was paid really little. But I arranged that $50 out of every paycheck be set aside. Since I never saw it in my checking account it didn’t really exist in my mind. I never missed what I hadn’t seen. $50 a pay period wasn’t much, but when I was laid off it was certainly helpful that that money had been put aside.
Now that I own my own business, I don’t get a paycheck from someone else so I have arranged for money to be withdrawn and added to my investments every month at the beginning of the month so I don’t ever feel I had that money to spend.
Rules are simply a way to manage your behavior, slow you down before you act. We, with ADHD, tend not to think too much about the future but the future costs money. Living to your financial limits monthly does not set you up for you future. Nor does it prepare you for emergencies, which you will have. Emergencies tend to cost money.
If you haven’t started yet, start now, putting aside some money for emergencies that is hard to get to. Also, create some rules that will interrupt your impulsive financial moments. That interruption could make the difference in how you manage your money day to day.