Saving Money With ADHD: Overcome Impulse Spending and Budget Better
With costs going up in almost every area of life, who doesn’t want to save more money? But saving money can be a unique challenge for those with ADHD. Many of ADHD’s most common symptoms — such as impulsivity, disorganization, and difficulties with goal-setting and time management — can make saving money a monumental task.
In this article, we’ll explore why people with ADHD struggle more with saving money compared to neurotypical people, and provide actionable tips you can use to spend less and set more money aside.
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ADHD and impulsive spending
Impulsivity is one of the most common traits of ADHD, and causes people with ADHD to act or make decisions quickly without fully considering the consequences.
One of the ways this shows up is in impulsive spending — multiple studies have linked ADHD with impulsive spending and other poor financial habits. People with ADHD often spend money impulsively as a soothing mechanism to distract them from negative emotions they may be feeling, even if they know they shouldn’t.
Credit cards make impulsive spending easier, and studies also link ADHD with credit card debt, the additional costs of which can make saving money even more challenging. Making impulsive spending more difficult to do is one of the most important strategies in saving more money.
ADHD and present bias
One factor that makes saving money more difficult for people with ADHD is present bias, a preference towards short-term rewards and benefits over long-term ones.
In one study, people with ADHD were asked if they would prefer to receive $120 today, or wait up to a year and receive up to more than double that amount. People with ADHD were more likely to prefer receiving a smaller amount of money sooner, indicating that they have a bias towards the present over the future.
Putting money aside for the future requires prioritizing future outcomes over present ones. If people with ADHD are more prone to present bias, they’re less likely to perceive the benefits of saving money versus spending it today.
ADHD and financial anxiety
ADHD and anxiety often go hand-in-hand, with research indicating that 47% of people with ADHD also have at least one anxiety disorder, and that people with ADHD are two to four times more likely to be diagnosed with Generalized Anxiety Disorder compared to other groups.
Even without an anxiety disorder, finances specifically can trigger anxiety in people with ADHD. In a study commissioned by a digital bank, 76% of people with ADHD — including 80% of women with ADHD — said they “suffer from anxiety linked to finances,” compared with 38% of the general population.
Also common in people with ADHD is rejection sensitivity dysphoria, a feeling of extremely emotional pain in response to rejection, criticism or failure. Improving your financial situation requires acknowledging the shortcomings in how you’re doing things today. If your current financial situation isn’t great, it might seem scary or painful to acknowledge this, and share that information with others (such as your partner or a financial planner).
While acknowledging your financial challenges can be scary, it's a crucial step towards building a better financial future.
ADHD and financial disorganization
One of the symptoms of inattentive ADHD — the most common type of ADHD in adults — is poor organizational skills. This can make it harder to save money in a few ways:
Budgeting requires some level of organization in tracking money in and money out. For someone with ADHD who struggles with staying organized, budgeting is naturally more difficult and unappealing to do
Bills may be tossed aside and not opened or paid until after their due date, increasing costs
Keeping financial documents such as bills and tax papers organized together makes it easier to track expenses and maximize refunds — but the organizational challenges associated with ADHD mean it’s less likely documents are being sorted appropriately
Staying organized can also be inhibited by chronic procrastination, which is also common in people with ADHD. Tasks like building a budget, reviewing and paying bills, and sorting documents are naturally unappealing, making them more tempting to delay — but putting them off can lead to more financial consequences in the future.
ADHD will always make keeping things organized more challenging, which is why it’s crucial to develop simple, straightforward ways to stay organized that are easy to stick with.
Tips for saving more money with ADHD
Have a goal: Your goal can be something like eliminating your debts, building six months’ worth of savings, or saving towards something specific like a down payment or a trip. Having a goal to work towards will help you prioritize the right decisions and help you stay motivated towards saving money.
Build a simple budget: This can be as simple as a spreadsheet that tracks monthly how much money you have coming in and your essential expenses such as rent, utilities, and food to understand how much money is left over for discretionary spending and savings. Prioritize simplicity to ensure that it’s something you’ll actually be willing to use!
Use a budgeting app: Instead of building a budget yourself, you can also have technology handle it for you. Popular apps for personal budgeting include YNAB (short for You Need a Budget) and PocketGuard. Both of these apps can connect directly to your banking accounts to automatically pull information in, removing much of the tedious and often stress-inducing work in building a budget manually.
Start filing stuff: Like with budgeting, keep your filing system simple to encourage yourself to actually use it. At the bare minimum, keep a folder for each year for storing relevant tax papers, bills, and receipts. If you’re feeling more ambitious or have a large amount of documents to sort, folders for each month within the year are likely a better option.
Set up automated payments: Many of your monthly bill payments can likely be automated, either through your bank or directly through each service's app or website. Paying bills automatically means that you don't have to worry about late fees, and makes it easier to understand how much money you actually have available.
Consolidate debts: If you’re carrying high-interest debt (such as credit card debt), consolidating that debt under a lower interest rate can help you save money and reduce the stress caused by making high interest payments every month. One way you can do this is with a balance transfer credit card, which offer low or no interest for a period of time when a balance is transferred from another account. Talk to your bank about available options.
Open a savings account: If you’ve been putting off opening a savings account, choosing instead to rely on your chequing and credit card accounts, it’s never too late to start! Savings accounts are typically free, so there’s no risk in opening it up right away. Once you have a savings account, start contributing to it regularly every month. Even if you start with a small amount, this will help you build the habit of putting money into savings, and hopefully encourage you to contribute more over time as you see the results!
Stick to your shopping list: If you’re going out shopping for the day, create a shopping list with all of the items you need and ensure it aligns with your budget. Then, try as hard as possible to stick to only buying items from that list. You can also withdraw an amount of cash that adds up to everything you need to buy that day, and force yourself to only use cash for the day, but this is admittedly more difficult as more businesses shift to cashless sales.
Use the 24-hour rule for purchases: A fancy new gadget or piece of clothing got your eye? Resist the impulse to buy it right now and instead wait 24 hours and see if you still feel like you really need it the next day. You might find that once that time passes, the purchase isn’t as appealing as it seemed at first glance. Doing this will help you build mental muscle for resisting impulse purchases and make more deliberate financial decisions. Just don’t use this as a license to buy everything you want after 24 hours!
Talk to someone who can help: This could be your partner, a trusted friend, or a financial planning professional. Having someone who can help you build your budget and support you in achieving your goals can help you build better strategies, stay motivated, and reduce the mental burden of having to handle everything yourself.
Treating ADHD can make saving money easier
As we’ve established, symptoms of ADHD such as impulsivity and disorganization can make managing your finances and saving money significantly more challenging. While we can build strategies to overcome those challenges, it doesn’t change the fact that symptoms of ADHD can make it hard to stick to those strategies and make smart financial decisions.
If you have ADHD and are struggling with your finances, ADHD treatment can make every step that follows so much easier.
At Frida, we’re dedicated to making it quick and simple for Canadians to get an ADHD diagnosis and treatment from qualified medical professionals — something that can often take a year or more or cost thousands of dollars through other public or private healthcare channels. And since Frida is a fully virtual healthcare provider, you can get your ADHD diagnosis and treatment from the comfort of your home.
Take Frida’s free 2-minute symptoms test to see if Frida can help you.