ADHD and debt

If you’re one of the two million or so adults in the UK diagnosed with ADHD, you’ll be familiar with some of the common symptoms, like feeling restless, forgetfulness, finding it hard to concentrate or acting impulsively.

But did you know that all these things can make it harder to keep on top of your finances and manage your money?

The role of executive function

For many adults with ADHD, financial difficulties stem from challenges in executive function (the skills that let you plan ahead and meet goals, show self-control and stay focused), such as:

avoiding making decisions related to money (which can make things worse, especially if you’re feeling guilty or anxious)
planning and organising
impulse control
paying attention to detail
task paralysis
time management
struggling to focus when creating a budget
losing track of your spending and debts

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Why does ADHD make it harder to manage money?

The short answer is simply that your brain is wired differently to someone without ADHD, so you process information in other ways.
We don’t know exactly why ADHD develops yet, but experts have linked the condition to levels of dopamine, a neurotransmitter that affects your emotions and behaviour.

This can lead to symptoms like impulsivity, inattentiveness, forgetfulness, difficulty making decisions and disorganisation.

Dopamine is released during rewarding activities to make you feel good, so you’ll seek it out again – when you have ADHD, you’re quickly searching for the next ‘hit’ because dopamine doesn’t stick as round as long in your brain.

If you’ve read Sophie Kinsella’s Secret Dreamworld of a Shopaholic, this quote from main character Becky Bloomwood sums it up nicely:

“When I shop, the world gets better, and the world is better, but then it's not, and I need to do it again.”

The ADHD tax

Research by Monzo found that those living with ADHD spent an extra £1,600 each year in ‘ADHD tax’ – money they spent as a result of the condition directly impacting their finances. A third (31%) of those with the condition said they were struggling with problem debt.

The ADHD tax may be a result of:

buying things you don’t need or want because of impulsive spending
forgetting to pay the bills – and getting hit with a late fee
not getting deals because you either can’t focus or end up in ‘analysis paralysis’ – where you shutdown after becoming overwhelmed with too many options
extra or unexpected payments directly related to your condition e.g. having to buy something you already have because you lost it
choosing short-term rewards over long-term goals e.g. spending over saving

Different forms of credit and ADHD?

It’s easy for credit card and buy now, pay later (BNPL) debts to build, as both forms of lending can encourage impulse spending.

They make it easy to spend money you don't actually have, which can be particularly problematic if you're impulsive.

Then, if you're unable to pay on time, late fees can soon add up. And with credit cards, you can be hit with hefty interest charges too, even if you're making the required minimum payments.

You're more likely to...

Impulse spend

According to Monzo, nearly half (48%) of those with ADHD say they frequently buy things on the spur of the moment – compared to just 12% of those without the condition.

Impulsivity can lead to people buying lots of small things they don’t really need or larger extravagant purchases without stopping to think if they can afford it.

‘Buy now, worry later’ is a reality for many.

Miss bill payments

Again, Monzo found nearly half (49%) of ADHDers said they’d forgotten to pay a bill – almost three times higher than those who are neurotypical (18%).

Missing payments can lead to late fees and can also hurt your credit score, making it harder to borrow money in the future or resulting in higher interest charges.

Increased chance of finding numbers difficult

Having ADHD can also increase your chances of having a learning disability called dyscalculia, meaning you struggle with maths and numbers (a bit like how dyslexia affects reading, writing and spelling).

About one in five people with ADHD also has dyscalculia, which can bring extra challenges – especially with budgeting and financial planning.

Additional financial hurdles

Struggles managing debt isn’t the only financial difficulty ADHD has been linked to – you’re also more likely to have experienced poverty growing up.

Children and young adults who’ve been diagnosed are twice as likely to come from England’s most deprived areas.

Can having ADHD be helpful for managing money?

Although those with ADHD are more likely to struggle with their finances, some people have reported perks linked to their symptoms.

For example, if money is something you can hyperfocus on, you might find it easy to make savings or budget, especially if you become engrossed in research. This can also mean you think outside the box as you look to get the best deals.

ADHD-friendly tips and tricks

You’ll feel more motivated to tackle these tips during your ADHD ‘power hour’ – that time of day when you’re getting everything done.

Curb impulse spending

Identify your triggers and temptations and work out how to avoid them.
Make a list before you go shopping and stick to it – you can also tell a friend what you’re buying for extra accountability.
Add up what you’re spending as you shop to keep track.
Wait a full 24 hours before committing to a big purchase to see if you still want it.
Unsubscribe from all marketing emails.
Make it harder to spend money – only take cash when you go shopping so you can’t overspend.
Keep your credit cards in a safe space, but not where you can easily see them – ‘out of sight, out of mind’ can really help.
Ask a loved one or someone you trust to look after your cards for you.
Manually enter your credit or debit info each time – this forces you to think about your purchases.
Window shop online - add things to a wishlist or shopping cart but don’t buy it. This satisfies the impulse without spending, check back in a few days and you might find you no longer want the items.

Set an ADHD-friendly budget

Work out how much you have to spend after you’ve paid the bills – divide what you have left by the days until you’re next paid and that’s your daily budget.
Try splitting your expenses into different groups – work out how much you spend on energy, food etc.
Put when bills need to be paid in a calendar so you can’t miss them. Check them off as you pay.

Tackle executive dysfunction

Technology can be a big help here so use it to your advantage – it’s like having a personal assistant in your pocket:

Set up your direct debits and standing orders in advance to avoid late fees.
Consider separate accounts for saving and spending – some banks let you set up ‘pots’ which are like giving yourself an allowance.
Set up automatic transfers to your savings account.
Create shopping lists and give yourself a cash limit.
Use mobile banking – instant notifications and seeing your balance in real time can really make a difference.
Set payment reminders – you can either use your phone’s calendar or download a specialist app.
Schedule your bills to go out when you’ve been paid – that way, whatever’s left over is yours to spend or save.
Set a savings goal – turn saving into a game to provide instant gratification, such as challenging a friend to save more by a set date.

Make it visual

Try creating a ‘no spend’ tracker on a calendar. Colour in each day you manage to avoid unnecessary spending. It’s a simple act, but offers instant satisfaction.
Track your spending using a notebook, spreadsheet or app – you’ll be able to spot patterns in your spending and see where you can make improvements.

Get a body double

This involves working alongside someone else while tackling those tedious financial tasks. Having a friend nearby can help you stay accountable and focused during overwhelming moments.

Be kind to yourself

It’s easy to feel shame or anxiety about financial issues, but remember to be kind to yourself. Ignoring money problems won’t help. It’s never too late to start building better saving habits or taking the first step towards getting out of debt.

Our free advice may help – you can access it online at any time of day or give us a call on 0161 518 8285. We’re here Monday to Friday 8am to 8pm and over the weekend between 10am and 4pm.