Money & Budgets

Stop Spending So Much Money! An ADHD Budgeting Guide

Remember: A “deal” is only good if you can afford it! Resist overspending throughout the year by following our step-by-step guide for devising a budget that an adult with ADD can actually stick to.

If you find yourself spending too much money you should take a step back and follow the steps in this guide.
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How to Budget in 10 Steps

For most people — especially impulsive and energetic people with attention deficit disorder (ADHD or ADD) — even the thought of sitting down and creating a budget sparks dread and anxiety. What's more monotonous and depressing than meticulously calculating exactly what you can't afford? But figuring out a personal finance plan that you can live with doesn't have to be torture. With our 10-step guide, you can create a money plan that will keep from spending too much money, and leave a little room for the occasional splurge.

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A woman sits on the floor looking at her bills, and realizes she has been spending too much money.
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1. Define the Budget

Sit down and define what "budgeting" means to you, and why you need it. Be honest with yourself, and admit if you inherently hate the word. Then re-position the budget as a necessary step that will let you plan ahead, and not worry about having money to pay your bills. Make a list of 10 good reasons to create healthy spending habits, then frame it and put it where you pay your bills. Individuals with ADHD thrive with specific action plans. This is your financial to-do list.

A woman takes cash out of her wallet and realizes she's been spending too much money.
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2. Don't Spend More Than You Make

The key to an effective budget? Spend less than your total income. Sounds simple enough, but it actually requires careful financial record keeping — not usually our strong point. For one month, record every purchase you make. Get a receipt whenever possible, record your checks, and print out receipts of online purchases immediately. Consider using a service like Mint.com or Slice to help you keep track of spending on the go.

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A woman starts to write her expenses in a notebook and realizes she's been spending too much money.
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3. Tally Up Your Lessons Learned

During your month of tracking, use a money journal to increase your spending awareness — and question whether each purchase is worthwhile. Adults with ADHD are prone to overspending, especially during the holidays. Willpower alone can't stop it. Instead, take five minutes a day to write down who you are buying for, and set a cap for how much you will spend. Record your feelings when you make certain purchases.

A man counts pennies and realizes he has been spending too much money.
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4. Ask, 'What Can I Change?'

At the end of the month, review your journal and look for patterns in your spending habits. Look at what you spent money on. Ask yourself:

  • How did I overspend?
  • How did I rationalize it?
  • How do I define luxury vs. necessity?
  • How did overspending make me feel?
  • What would I have to change to stick to my budget?

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A dollar sticking out of a piggy bank, a reminder to stop spending too much money.
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5. Cut Costs

Certain costs, of course, are fixed. So look for discretionary places you've been splurging. Did you buy new books, even though your shelves are groaning under the weight of unread ones? Did you buy another outfit, even though your closet is full of clothes you've barely worn? Did sale items lure you in? Or did you go crazy at the grocery store?

A woman checks her credit card statements on a computer and realizes she's been spending too much money.
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6. Devise Solutions

Try these ideas to avoid overspending: If your bank kills you with administrative fees, change to a free checking account and set up automatic bill paying. If you're making impulsive purchases, leave credit cards and extra cash at home. If it's ADHD treatment that's draining your wallet, look into state programs that help cover the cost of medical expenses, plus tax deductions.

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A woman uses a calculator to sum her expenses and realizes she's been spending too much money.
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7. Create Your Budget

Now, it's time to list out all of your expenses — fixed and discretionary — for a typical month. Aim to save 10 percent of your monthly income, and always have three times your spendable income (after taxes) in the bank just in case. Then, adopt an attitude of gratitude. Your budget meets your basic needs, so you're not "doing without." You'll be more likely to stick to the plan if it includes some fun spending, too.

A jar of coins labeled accident can save the day if you've been spending too much money.
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8. Plan for Budget Busters

No matter how well you  plan, unexpected events and emergencies are bound to pop-up. The best budgets account for this. Take preventative measures to stave off big expenses. See a doctor regularly to manage your family's health. Complete routine maintenance on your home and car. Have extra money set aside, just in case, for when these events inevitably occur. Include the amount in your savings budget.

Two binders labeled 'Budget' to help adults with ADHD keep from spending too much money.
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9. Organize the ADHD Way

Keep your financial documents in order all year long so you can get the best tax refund possible. Use an ADHD-friendly system. Have a folder for each month to store critical financial records. Color-code any additional folders for the type of document they hold. Bribe yourself with a special treat to ensure that you organize the papers once a month.

A financial advisor gives advice to a woman who has been spending too much money.
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10. Get Help When You Need It

Many people find it helpful to use a computerized financial program like Microsoft Money or Quicken. If you need help using the software, or if you're overwhelmed by the process in general, consult an accountant or financially savvy friend. You can also find advice at websites like Mint  and LearnVest.

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