Reasons People with ADHD Struggle with Finances

‍Understanding the ADHD brain and finances

If you’ve got ADHD, you might roll your eyes at traditional personal finance advice. As a late-diagnosed ADHDer and financial therapist, I want to share that not all hope is lost! We can learn to understand our ADHD brains, get curious about the reasons that finances can be so hard, and identify strategies to help us be more in charge of managing money. 

ADHD symptoms

Attention Deficit Hyperactivity Disorder, more commonly known as ADHD, is a type of neurodiversity. According to research, adult ADHD brains look different than neurotypical brains on brain scans in adults. Some studies have found that certain brain parts are more active, whereas others show less activity. Studies have also found that the neural pathways in an ADHD brain differ from a neurotypical brain. Some studies have found that certain brain parts are more active, whereas others show less activity. Studies have also found that the neural pathways in an ADHD brain differ from a neurotypical brain.

If that sounds like a lot of sciency-talk, let me put it this way: the parts of the brain that are responsible for executive functioning, motor control, and emotional regulation are affected by ADHD. When we think about how an ADHD brain’s executive functioning works, problem-solving, paying attention, organization, and task completion are often tricky.

5 reasons people with ADHD struggle with finances

Many of the skills required for money management, organization, prioritizing, and follow-through are struggles for people with ADHD. With financial matters, I hear five common money struggles from clients with ADHD. These executive function symptoms impact money management with problems prioritizing, impulsiveness, trouble with time management, disorganization, and low frustration tolerance.

Problems prioritizing & focusing. 

With so many personal finance “rules” (You need to focus on an emergency fund! Prioritize paying off debt! You need to start investing!), it’s no wonder that the ADHDer might struggle to prioritize financial tasks. On top of that, once a person with ADHD gets their financial tasks prioritized, it can be difficult to sustain focus long enough to follow through on those tasks.

Impulsivity. 

If you’ve got ADHD, I bet you’ve experienced impulsivity! Ever do something, and midway through, you go, “Huh, I did NOT think this through at all!” Financially, this might look like clicking “buy” on an online shop, saying “yes” to a vacation, or signing up for a service before thinking about the consequences. Financial impulsiveness can be a big struggle for an adult with ADHD.

Poor time management skills. 

People with ADHD often struggle to track their time. This can look like arriving places late or being so fearful of arriving late that they show up too early. Outside of appointments, people with ADHD might struggle with estimating how long a task will take or skipping over an urgent task for one that seems more exciting. ADHD brains are focused on what is happening NOW, making planning for the future, especially financial planning, challenging.

Low frustration tolerance. 

Folks with ADHD might struggle to manage their emotions compared to their neurotypical peers. Some research suggests that low frustration tolerance is from sensory overstimulation, whereas others think it’s a form of impulsivity (as in, when an emotion arises, it arises in a big way).

Whatever the reason, when it comes to managing finances, if a money management plan feels overwhelming or worse, boring, they might respond with anger, a meltdown, tears, or avoidance.

Disorganization. 

The prefrontal cortex is the part of the brain responsible for organization, and ADHD often impacts it. This can lead to different types of financial chaos. Physical disorganization can look like paper clutter, personal finance books half-read and highlighted “to read later,” or stacks of unopened credit card bills. 

Mental disorganization can look like forgetting when your bills are due, not remembering bank holidays that impact the direct deposit of your paycheck, or, if you are self-employed, struggling to find a system that helps you stay on top of quarterly taxes.

Understanding the ADHD tax

Adults with ADHD face unique challenges when it comes to overspending, often falling into three common patterns. The first is what's known as the "ADHD tax," where people buy items they think they've lost due to issues of disorganization or forgetfulness. For example, they might purchase new sneakers, only to discover their old pair in a gym locker or laundry pile later.

Dealing with impulsive spending 

ADHD is linked to lower dopamine levels, meaning some people try to get a dopamine rush through shopping and spending money. Additionally, individuals with ADHD tend to be excited by novelty, becoming hyperfocused on new hobbies and changing their spending habits to support new interests. 

To manage overspending with ADHD, you can try a "cash only" approach. Start by figuring how much wiggle room your monthly budget has to go toward an "ADHD fund," or "splurge fund," and take out that amount in cash each month so you can splurge within reason. 

You can also make impulsive spending more challenging by removing your credit card from digital wallets, unsubscribing from marketing emails, creating shopping lists before going to the store or setting social media timers to limit exposure to shopping-related content. 

4 solutions to ADHD money management problems

The first-line treatment for ADHD is medication plus behavior modification therapy or coaching. I highly recommend starting treatment for ADHD symptoms there. For additional ways to help with the financial problems related to having ADHD, I’ve got four solutions, including timers and reminders, having a “home” for items, automation, and time-limited learning.

Timers & reminders

Using timers and reminders can help you with managing money. You can set a timer to see how many financial tasks you can complete in 30 minutes. Or you can create a deadline for a financial task on your to-do list, such as “open a CD by the end of the week.” 

Create a monthly reminder that pops up on your phone. You can set it to remind you to do anything from opening your bills to making sure you paid your rent. Timers and reminders can help combat difficulties with time management or disorganization common with ADHD. 

Having a “home” for your belongings

Create “homes” for all your frequently misplaced items (think: what items are most subject to the ADHD tax?). For example, shoes always go in the shoe closet, keys in a tray right by the door, and a phone charger that doesn’t leave the outlet (or two: one for your bedroom and one for your car). The more you can “put things away” instead of leaving a snail trail of stuff, the less likely you’ll have to repurchase things or lose an important item.

Managing money: automation for bills, saving, and investing

Automation can help with time management, difficulties prioritizing, and disorganization. Putting all your bills on autopay is the key to making financial automation work for you. Setting up an automatic system requires some work upfront with your online bank, but it helps pay dividends over time. 

For ADHD adults, I suggest having a trusted friend sit with you or using a body doubling service to help you get the automation set up. You can automate your payments to prevent unpaid bills and set up auto-save within your bank account to contribute to your financial goals on auto-pilot.  The freedom of not getting hit with late fees or impacting your credit score because of automation can be a great way to help manage money.

Time-limited learning 

People with ADHD love something shiny and novel to get excited about. Why not let money become something on that list? Challenge yourself to listen to a money podcast once per week, check out a personal finance book from the library, or join a free money-saving challenge. Just make sure you create some guardrails so learning about money doesn’t become an expensive hobby! 

Help with ADHD and finances

If you struggle to manage your personal finances and have ADHD, it’s worth talking to a therapist who gets it. The best therapist for these struggles is experienced in helping address the challenges of ADHD and finances can help you find and implement coping strategies that help you keep more of your hard-earned money. Plus, a good therapist can help you find compassion for yourself and your neurodiverse brain. 

I provide training and workshops on the emotional side of money to help organizations enhance and enrich financial literacy programming. Learn more about my speaking engagements, or visit my website to explore other resources I've created on how to manage the emotional side of money.