ADHD and Money
This blog article reflects the insightful conversation we had with Kelly Bracegirdle on our podcast season 2 episode 8, ADHD and Money.
ADHD and Money: Navigating Financial Challenges with Awareness and Strategy
Managing finances can be a challenge for anyone, but when you throw ADHD into the mix, the hurdles can seem like Mount Everest. In our latest podcast episode, we had the absolute pleasure of chatting with Kelly Bracegirdle, an enthusiastic and passionate advocate for ADHD awareness. She shared her personal journey with ADHD and how it’s impacted and shaped her relationship with money.
Understanding ADHD and Its Impact on Household Finances
ADHD (Attention-Deficit/Hyperactivity Disorder) affects an individual's ability to focus, organize, and manage time effectively. These traits can make financial management particularly tricky and overwhelming. Kelly, diagnosed with ADHD Combined later in life, knows these challenges all too well. From impulse buys fuelled by the need for a dopamine hit to the struggle of keeping track of bills and subscriptions, ADHD can make even the simplest financial tasks feel like a marathon. According to an ANZ report in March 2023 on financial wellbeing, 23.5% of people struggling with their finances know they run short of money because they over-spend.
The Power of Labels and Advocacy
Kelly emphasized the importance of embracing her ADHD diagnosis. While some might see labels as limiting, Kelly finds them empowering. "Labels help you advocate for yourself," she said. Understanding her ADHD allows her to seek the right support and strategies to manage her life and money in a way that works for her.
What’s the ‘ADHD Tax’?
A significant concept Kelly introduced us to was the "ADHD tax" – the often hidden costs that come from impulsive spending, missed payments, and unreturned items. For example, Kelly shared how she often buys clothes online but procrastinates returning items that don't fit, leading to wasted money. Additionally, food waste from forgotten groceries and subscriptions that renew automatically without notice are common pitfalls for her and we imagine, a lot of people with similar impulsive spending behaviours.
Although Kelly talks about getting into trouble when younger with a MYER card, she was unlike most young adults with ADHD we know, in that she had a partner who ‘handled’ the bank account and took the everyday management of the money on. Acknowledging now she would like more to do with that everyday management, it was fortunate at the time because data shows that ADHDs impulsivity can create a myriad of financial issues such as:
· Unpaid, overdue bills accumulating and being sold to debt collectors
· Multiple, ongoing subscriptions that never get cancelled
· Frequent, spur-of-the-moment decisions resulting in overspending
· Lack of future planning or savings, leading to a lack of financial resilience
· High-interest loans or credit cards that are never refinanced or reviewed
· Stress and shame about financial situations and mounting debt
Living costs, personal financial issues, and the economy are three of the top four leading causes of stress in Australia (NAB, 2022).
Strategies for Better Financial Management
Kelly shared several strategies to reduce the “ADHD tax” on her finances:
· Delayed Purchasing: Kelly leaves items in her online shopping cart for a few days before buying them. This gives her time to reconsider if she truly needs the item, reducing impulse buys. If she still wants it after a few days, she checks out the cart. That initial thrill of putting them in the cart might have been all she really needed at the time.
· Visual Aids: Using visual systems like a whiteboard or the old envelope cash system to track expenses and manage money can provide clarity and order that spreadsheets might not offer for someone with ADHD. Simple savings or budgeting apps that reinforce positive cash flow with clarity and colour can create optimism and enhance positive feelings about handling money.
Hosts Mel and Darlene also suggested:
· Bank Account Structures and Automation: Setting up multiple bank accounts for different purposes, similar to the envelope system, can help manage spending and ensure money is allocated appropriately without constant tracking. Only having a debit card for essential accounts and one for discretionary spending can help manage finances more mindfully. setting up direct debits and automated transfers here can help with not missing bills or important payments. Some banking apps also have regular bill reminders you can switch on.
· Fun Spending Budget: Darlene suggested setting a specific spending budget that Kelly (and her partner) do not have to feel guilty or ashamed about, allowing her to spend on whatever she wants without impacting household finances or worry about overspending, or having regrets later.
· Know Your Numbers: Darlene also mentions to ‘know your expenses’ and ‘know your number’ which means to really understand from the top down what your household income is, and what your living expenses are as a household. How much does it cost you to live? And how much do you have ‘left over’ from your income each pay cycle? Knowing this number gives you a level of clarity on what your essential costs are versus your discretionary spending, and putting some aside for the future (to grow your savings and build your financial resilience) is practically growing your own level of financial wellbeing.
Emotional Barriers and Triggers
Kelly discussed the emotional barriers to effective money management, such as the shame and embarrassment of going through past spending line by line. These feelings often stem from past financial mistakes or societal judgments about money. She stressed the importance of open, judgment-free conversations about finances, both with partners and oneself, acknowledging sometimes we truly are our own worst critic.
Understanding our triggers helps us avoid impulse spending situations altogether in the first place. These might be emotional, like needing a quick dopamine hit from shopping when feeling down, or physical, like ordering takeaway when too tired to cook. Kelly mentions just pinching a sibling can give a child a bit of that positive dopamine but as adults, being mindful of what triggers your spending is an important step to making practical change to your money situation.
Having a list of alternative ways to achieve momentary elevated dopamine levels (maybe even written on a large whiteboard or sign in the loungeroom!) could help deter you from opening that shopping or takeaway app... Try different things to find ways that work for you, like:
· Taking a warm bath or hot shower
· Spraying your favorite perfume
· Journaling or drawing with your favorite pen
· Walking barefoot on grass or a fluffy rug
· Brewing your favorite tea or coffee
· Chatting with a favorite person
· Looking back at feel-good pictures or videos
Managing Income and Employment
Kelly remains optimistic about her future. She works in a job with flexible, casual hours that suit her busy life as a mother. Prioritizing rest periods has been crucial for juggling work and family. Her financial goals include becoming more involved in managing household finances and finding systems that work best for her unique needs. She agrees with Mel and Darlene on the need for workplaces to provide flexible working options and support employees with ADHD, as their unique abilities can add amazing value when appreciated and understood.
Embracing the Journey
By understanding her condition, advocating for herself, and implementing practical strategies, Kelly has made significant strides in managing her money, personality, and ADHD diagnosis. Her journey highlights the importance of awareness, support, and the right tools in overcoming the financial challenges associated with ADHD.
For anyone struggling with a similar diagnosis, Kelly's advice is clear: embrace your diagnosis, seek supportive communities, and don't be afraid to try different strategies until you find what works for you. With the right approach, managing money with ADHD is not only possible but can lead to greater financial stability and peace of mind.
Listen to the full podcast here: https://www.themoneycollective.com.au/podcast
This article provides general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information provided, you should consider the appropriateness of the information and the nature of the financial product in regards to your objectives, financial situation and needs. We recommend discussing your personal situation with a financial professional.
Blog article by:
MEL PEARCE
Co-Founder, Financial Wellbeing Coach and Mortgage Broker
The Money Collective