Managing Finances with ADHD: Tips for Saving Money
ADHD impacts an estimated 8 million adults in the US, often leading to challenges in managing finances. People with ADHD report higher levels of debt, impulse buying, difficulty saving money, and trouble understanding bank protocols. If you find yourself struggling in this area, you’re not alone. Like many others, you might face issues with impulsive spending, leading to student debt, credit card debt, and a constant struggle to save money.
Expert Insight from David DeWitt
To shed light on this issue, I spoke to David DeWitt, a 32-year-old certified financial planner at DeWitt Capital Management in Wayne, Pennsylvania. DeWitt, who also has ADHD, understands the challenges firsthand. He emphasizes the importance of creating systems that automate savings and curtail spending, making it easier for individuals with ADHD to manage their finances effectively.
DeWitt’s Tips for Cutting Back on Spending
Here are some practical tips from DeWitt that may help you rein in impulsive spending and work towards paying off debt:
Creating Awareness of Spending: Write down every single purchase for three months to track your spending habits and identify areas where you can cut back.
Switch to Debit Cards and Cash: Avoid using credit cards for at least three months to prevent overspending and accumulate more debt.
Cancel Subscriptions and Memberships: Eliminate services that encourage impulsive shopping and try to determine if you genuinely need them.
Use App and Website Blockers: Block access to shopping websites and apps to break the habit of impulse buying.
Managing Money to Pay Off Debt and Save
To effectively pay off debt and save money, DeWitt suggests reverse budgeting, where you prioritize savings and debt payments before allocating the rest of your income. This method ensures that you save and pay off debt consistently while still covering your expenses.
Creating Specific Bank Accounts: Establish separate accounts for different financial goals, such as monthly bills, emergency savings, housing, investments, and personal spending. Naming these accounts clearly can help you stay on track.
Automate Bill and Debt Payments: Set up automatic payments for bills and debt to avoid missing deadlines and incurring additional fees.
By following these strategies and seeking professional advice, individuals with ADHD can take control of their finances and work towards a more secure financial future. Remember, it’s essential to be patient with yourself and seek support when needed to navigate the challenges effectively.