Let’s Talk About MONEY…
We’re already in the Holiday buying frenzy season, so step back for a minute to take this Reality Check! (And check out my Time Machine ride, below.)
Some of you are brilliant at earning and managing money. Others have the skill to grow what you’ve earned or have family money to spare. This blog isn’t for you.
Many people with (and without) ADHD have financial issues. The reasons vary, but here are some common ones – can you relate?
- It’s Now… or Not Now. When you live in the moment, it’s difficult to plan for the future, whether it’s putting aside money for emergencies or unanticipated events (car repair, best friend’s wedding, new air conditioner, etc.)… OR for non-immediate goals (vacation, new house, newer car, etc.)… OR for longer term needs like retirement planning.
- I Want; therefore, I Do. Impulse control isn’t high on the list of ADHD characteristics. If you are lured by items in a store, online or even on a restaurant menu, your first thought may not be whether you can afford – or need – the purchase. You’re less likely to weigh benefit against cost (and even if you do, you’ll more likely decide the value is in the purchase or the cravings, not the savings).
- Appeal of the Bright and Shiny Object. It can be a new outfit, despite a bulging closet and emaciated wallet. It might be a new hobby or adventure, regardless of the cost or despite an already maxed out schedule. If it sparks your attention, diverts you from dreaded boredom, sends a dopamine rush of exciting possibility to your brain – well then, money isn’t the major consideration, if considered at all.
- FOMO – Fear of Missing Out. It’s too easy to spend money on things we don’t need (the latest phone upgrade?) because if we don’t have the newest and best we’re worried we’ll be out of sync, or ‘less than.’
- Did I or Did I Not? If you can’t remember whether you bought something, or if you know you did but forgot where you put it, you’re more likely to purchase it, or something similar, a second (or third) time.
- Magical Thinking. The Cambridge English Dictionary defines this as the “belief that thinking about something or wanting it to happen can make it happen.” Sometimes this is a good thing, as evidenced by the benefits of positive thinking and even the Law of Attraction (when coupled with action!). However, when our current financial actions are driven by future income possibilities, it usually means trouble: l can afford this now as I’ll be able to pay for it when I get my new, better-paying job … I’m in line for an inheritance, someday … I’ll marry into money … I will win the lottery … or the horserace. Maybe, but what are the consequences if you don’t?
- Difficulty Planning. It’s often a challenge to make decisions that will make a goal so specific and real that you can appropriately budget for it. Let’s say you need additional education or training to change or advance your career. You’ll need to decide on the course, the school and the timing. Only then will you know the expense. Then you’ll need to decide how you’ll pay for it. Do you have the money? Can you save it? Is it worth a loan? Can you get a loan? ALL decisions! Or, you may want to take a vacation, but where to go? With whom? Fly or drive? When? Tour, hotel or house rental? So many decisions! (BTW, mind-mapping can be very helpful for this type of planning.) Do you have money set aside for a vacation? Can you save it? How much you need will depend on the variables, or the variables will depend on how much money you’ve set aside. This required thinking is exhausting for many people with ADHD, who easily suffer from decision-making fatigue. So, the tendency is to postpone making ANY decisions or to make decisions without thinking through financial considerations.
- Commitment Phobia. This is a common concern that interferes with making plans. How will I know if I want to do this in six months – or six days – from now? What if something else comes up? You are likely to spend more when you do things last minute, or impulsively, than if you’ve planned in advance.
- Boredom. Spending money is often tied in to alleviating boredom. And many of us get bored easily and look for diversions, whether it is a shopping trip, entertainment activity or event, online browsing session, expensive restaurant, bar night out, etc. This can easily negatively impact our budget. Contributing to the drive to spend money is the dopamine rush that comes with the excitement of buying something that attracts us (and might also temporarily help with depression or anxiety). This adds to the appeal for ADDers, making it more difficult to avoid impulsive buying.
- The Cost of Happiness. Studies show that experiences, including convenience services, contribute more towards feelings of happiness and satisfaction with life (and relationships) than do material purchases. Spending money on a cleaning or meal delivery service, which gives the gift of time (and avoids chores that, for many, are not highly desirable), may increase happiness, but negatively impact bank balances. Even so, these expenses may be worth adding to your budget!
- Avoidance of the Reality Check. If we aren’t clear about our income, our savings (or lack of) and our expenses (fixed, variable and discretionary), we don’t have the info we need to weigh a purchase against the reality of whether – or not – we can afford it.
So, what does it take for a Reality Check?
|OK, this time machine won’t really transport me to another era (magical thinking to the max!). Sadly, I won’t be able to improve my finances by going back in time to buy IBM, Apple or Google at first offering, or buy into that NYC co-op conversion. (But thanks, Rob Niosi, for the make-believe time travel on your magical work of art!) |
Since I have to face the reality of my finances and to understand money and how it affects me, I need to gain clarity about:
- My actual income, after taxes. (BTW, if you are entitled to reimbursement for business or medical expenses, and struggle to get in the paperwork, give yourself permission to have someone help you submit those expenses!)
- My fixed and variable expenses – the money I need to spend to live (not necessarily to live well…). This includes required expenses related to basic housing, groceries, clothing, electronics, transportation, home and personal care. Also,insurance and medical care along with regular savings for emergencies, unexpected needs, special expenses and retirement. It might include loan and credit card payments (including student loans), plus expenses related to children, dependent parents, pets, etc.
- My disposable income – the amount of money I have left AFTER I deduct all of my necessary expenses. The availability (or not) of disposable income also affects the quality and quantity of my choices (Mercedes or Honda… house or studio apartment… Nordstrom or Walmart… exercise DVD or gym membership… luxury hotel or inexpensive hostel).
- My discretionary expenses – the things I buy because I want them; not because they are necessities. This category includes entertainment, dining out, vacations, renovations, etc.
So, Reality Check: What is your REAL income after taxes? How much do you need for your fixed and variable expenses? The amount remaining is ALL you have available for your discretionary expenses, unless you want to run up debt that will only compound the problems.
Ouch! Our tendency is to overspend because confronting the reality of how much money we require to live, and how much we have left after those expenses, is something we want to avoid.