Rewards & Consequences

Mo’ Problems? Raising Smart Spenders (and Savers) with ADHD

Money management skills sometimes elude children with (and without) ADHD when they don’t understand the behavioral and psychological factors that sway our spending and saving decisions. Here, learn how to raise fiscally savvy kids with ADHD.

Behavioral finance for teens with ADHD
Behavioral finance for teens with ADHD

Our relationship with money — how we think about and manage our finances — tends to influence all facets of our lives. Yet most of us avoid talking about money because it makes us uncomfortable, which means our kids miss the opportunity to understand behavioral finance and develop money management skills under our guidance.

Behavioral Finance and ADHD

More than 60 percent of adults with ADHD have significant to severe financial difficulties. I learned this from Rick Webster, founder of the financial literacy education company, who cited a host of root causes like impulsivity, job instability, lower education levels, disorganization, and more.

Parents with ADHD are less likely to model healthy money-management skills for their kids. Even when parents handle money well, adolescents and young adults with ADHD do not learn by observation alone. At some point, they need lessons — and opportunities to apply them.

[Watch: How to Teach Teenagers About Money]

Webster explains that kids need to learn more than the mechanics of math; they need to understand behavioral finance, or “why we make the money decisions we make.” In other words, building budgets is not enough.

How Parents Can Raise Smart Spenders

For Younger Children and Tweens

  • Begin talking with your kids about money before they have any of their own.
  • Raise awareness by discussing the relative costs and value of things in their lives.
  • Ask questions that inspire kids to think about their values and goals.
  • When kids begin to accumulate money, teach them to separate it according to three categories:
    • Saving for the future
    • Setting aside for spending
    • Earmarking for charity. Begin a family tradition of choosing and donating to charitable organizations each holiday season.

[Read: Allowance Dos and Don’ts]

For Tweens and Teens

  • As your kids take charge of their own saving and spending, expect some setbacks. If they spend unwisely (and sometimes they will), talk with them about it. Use mistakes as a chance to learn.
  • Teach kids to save and plan for a purchase. If a product costs more than expected, don’t completely rescue your kids. If you contribute toward the cost, have them reimburse you.
  • As kids get older, teach them about credit. Explain that borrowed money becomes debt they must pay off every month.

For College-Age Adults

  • If you haven’t done so already, put your young adult in charge of his money.
  • Collaborate with your child to create a reasonable budget.
  • Encourage them to apply for a credit card and pay off the balance each month by matching spending to saving.
  • Teach them the importance of a good credit rating, and how to improve it.
  • Encourage them to use an app or spreadsheet to monitor their money — how much they earn and spend, and what they are spending it on.

Behavioral Finance and ADHD: Next Steps

Elaine Taylor-Klaus is a co-founder of Find more strategies in Elaine’s book, The Essential Guide to Raising Complex Kids with ADHD, Anxiety, and More and the Sanity School for Parents, a behavior therapy training program.

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