ADHD Tax: Simple Tips to Save Some Money in 2024
Managing finances can be a Herculean task for people with ADHD, often leading to what’s known as the “ADHD tax” — those unintended extra costs from late fees, incomplete returns, or forgotten appointments.
But knowledge is power.
In this guide, we’ll tackle the ADHD tax head-on and provide you with actionable strategies to take control of your finances in 2024.
Discover how you can save money, reduce stress, and avoid financial pitfalls with some creative strategies and a lot of grace.
ADHD Tax: Simple Tips to Save Some Money in 2024
If you’ve ever felt the sting of paying late fees, missed promotional discounts, or losing important receipts, you might be familiar with what’s called the “ADHD tax.”
Adults with ADHD often face unique financial challenges because staying organized, managing time, and remembering to do tasks are chronically difficult.
But what exactly is the ADHD tax, and how can you avoid it?
This blog offers educational content; not medical, legal, or financial advice. Please, consult a certified professional for related concerns. This article contains affiliate links. If you purchase through these links, I may earn a small commission at no extra cost to you. Thank you for helping to support this small business and my family!
ADHD Tax – A Definition
ADHD Tax refers to the extra costs people with ADHD often incur due to the symptoms of their condition.
These costs can add up over time and affect your financial situation.
ADHD causes challenges such as forgetfulness, disorganization, and impulsiveness.
These traits may lead to financial errors and oversights, causing monetary losses.
Let’s look at some specific instances where this happens.
If you have ADHD, you're likely familiar with late fees. Missing deadlines for bill payments because you forgot or got distracted can lead to these fees.
Sometimes, it’s not just about paying late but forgetting to pay altogether. Missing bills can cause services to be interrupted.
Ever signed up for a subscription service you don’t use?
Many people with ADHD find themselves paying for gym memberships, streaming services, or premium app subscriptions they rarely or never use.
This adds up quickly and leads to wasted dollars every month.
Impulsiveness can lead to buying items you don’t need.
Whether it’s clothes, gadgets, or even snacks, these small purchases pile up and strain your budget.
Your legitimate inability to keep things organized can lead to lost documents, lost time searching for things, and even lost jobs.
Replacement costs, missed deadlines, and lost opportunities all contribute to the ADHD Tax.
Key ADHD Symptoms Affecting Financial Management
Living with ADHD affects finances in so many ways. Symptoms can directly impact how you handle money.
Let's explore some specific symptoms and their financial effects.
Impulsivity is one of the classic symptoms of ADHD.
It often leads to making unplanned purchases.
Have you ever found yourself in a store, ready to check out, and realized how many extra items you picked up that weren't originally intended?
Certain popular box stores, for example, are easy to get lost in and overspend.
Getting distracted by attractive displays, toe-tapping music, and effective advertising is super easy to do, making those lists you brought with you feel less real.
Overspending on non-essential items can take money away from essential expenses.
Frequent, impulsive purchases on credit cards will lead to accumulating high-interest debt if not paid promptly.
Financial planning, in turn, is more difficult when you are prone to making spontaneous purchases.
Forgetfulness can have direct financial consequences.
Missing bill payments and forgetting tax deadlines can lead to extra fees and penalties. This can make it harder to keep up with financial obligations.
Forgetting to pay your utility or credit card bills on time can result in costly late fees.
Not filing your taxes on time can lead to penalties and interest on unpaid taxes.
For entrepreneurs, forgetting to follow up on potential leads can mean missing out on profitable deals.
Disorganization can turn your financial life into chaos.
When you’re disorganized, finding important documents like receipts or tax forms is like finding a needle in a haystack.
This can cause stress and shame, leading to procrastination. Procrastinating on your taxes can lead to last-minute stress and mistakes.
Misplacing receipts may result in losing out on tax deductions and paying more than necessary.
Disorganization might cause you to overlook due dates for bills or avoid basic investment opportunities.
Strategies to Manage Money with an ADHD Brain
Managing finances can be extra challenging when you have ADHD. Simple tasks like paying bills or saving money can feel overwhelming.
However, with the right strategies, you can take control of your finances and minimize the ADHD tax.
One of the best ways to manage your money is to simplify and automate as much as possible.
This helps ensure you don't miss payments or forget to save.
Set up automatic payments for your recurring bills. That way you're less likely to miss due dates, avoiding late fees and penalties.
Automatically transfer a portion of your paycheck to a savings account. This helps you save without even thinking about it.
Use budgeting apps like Mint to track your spending and help you stick to a budget.
Many of these apps allow you to link your accounts to avoid manual entry.
By automating these tasks, you reduce the need to remember multiple dates and amounts, making financial management easier and less stressful.
Seeking assistance from ADHD coaches, and studying personal finance on your own time from reputable sources, can also make a significant difference.
ADHD coaches specialize in helping individuals with ADHD manage daily tasks, including financial responsibilities.
They can offer strategies and accountability to help keep you on track.
Getting professional help can provide you with expert advice and the support you need to stay organized and financially healthy.
In addition to automation and professional help, use reminders on your phone or a calendar to keep track of important financial deadlines.
Break large tasks into smaller steps to make them more manageable.
Keep all your financial documents in one place using a filing system or digital folders to organize your most important documents.
By implementing these tips, you can create habits that make financial management more straightforward and less daunting.
Managing money with ADHD might seem tough, but by automating processes, seeking help, and implementing recurring reminders, you can work to minimize the ADHD tax.
Tools and Resources for Better Money Management
Managing finances can be challenging, especially when dealing with ADHD. However, using the right tools and resources can make a huge difference.
Here are some tools and resources to help you stay on top of your finances and minimize the ADHD tax.
Many budgeting apps are designed with features that assist individuals with ADHD. These apps focus on simplicity and consistency.
Goodbudget, for example, employs an envelope budgeting system to visualize spending. It syncs across multiple devices, making it easy to access anywhere.
I tried this but eventually gave up because I got tired of tracking every receipt.
Connecting with others who understand the unique challenges of ADHD can be incredibly beneficial. Here are some community resources and support networks.
ADDA (Attention Deficit Disorder Association) offers webinars, support groups, and helpful articles. It provides a platform for sharing experiences and tips.
CHADD (Children and Adults with Attention-Deficit/Hyperactivity Disorder) leads online and in-person support groups. It provides resources for managing ADHD at different life stages.
ADHD reWired is an award-winning coaching, podcast, and accountability community led by Eric Tivers, LCSW.
Utilizing these tools and resources can make a significant difference in your financial management as well as your entire life. Remember, it's all about finding what works best for you.
Finally, for help getting through dense financial copy, terms and conditions, return policies, or financial planning resources, I recommend using Speechify.
Speechify is a text-to-speech AI voice generator. You can choose a voice tone that appeals to you, from simple choices, to accents, and even celebrities!
Upload your content in various formats (links, pdfs, copy/paste, and more) click the speed you want to listen to, and away you go.
I have been using it for a couple of years now, and can honestly say it has made a notable difference in reading speed, comprehension, and completion rate.
If you or anyone you know is studying, upskilling, job hunting, blogging, researching, or really any task that involves a great deal of reading, this tool truly lessens the amount of energy and effort involved.
So it lets you free up those executive functions for other important tasks like canceling your unused gym membership!
Impact of ADHD on Credit Score
A credit score is a three-digit number that shows how likely you are to repay debt.
Lenders, like banks and credit card companies, use this score to decide whether to give you a loan or a credit card, and at what interest rate.
Your credit score is calculated based on several factors such as your payment history, credit utilization, length of credit history, types of credit, and new credit.
Your score can range from 300 to 850. A higher score means you're more creditworthy.
In other words, a good credit score can save you money and open financial doors.
If someone struggles to manually pay their credit card bill on time, missed payments will likely result.
These deficits then get reported to credit bureaus, causing your credit score to drop.
Even one late payment can negatively impact your score for up to seven years.
The more missed payments you have, the lower your score will get.
It's a domino effect that can make getting loans or even renting an apartment more difficult.
Improving your credit score when you have ADHD involves a few actionable steps that you can easily integrate into your daily routine.
Set up automatic payments to remove the burden of remembering due dates, ensuring your account has enough funds to cover these automatic payments to avoid overdraft fees.
Even better, find a bank that won't charge you for that. Sometimes local credit unions can help you with this.
Utilize calendar apps on your phone to set reminders a few days before bills are due.
Download apps that categorize your spending and help you stay on track with your financial goals.
Regularly review your credit report for any errors. Mistakes can lower your score, so dispute any inaccuracies you find.
By taking these steps, you can work to mitigate the effects of the ADHD tax and work towards building a healthier credit score.
Small changes in how you manage your finances can lead to significant improvements over time.
Frequently Asked Questions (FAQs)
Living with ADHD comes with its own set of challenges, including financial management.
Let's address some of the most common questions about the “ADHD tax” and how it affects daily life.
What is the ADHD tax?
The ADHD tax refers to the extra costs and financial burdens you might face due to symptoms of ADHD.
These can include late fees, higher interest, or a lower credit score.
Essentially, it's the unintentional financial penalty paid for the distraction, forgetfulness, and emotional dysregulation often associated with ADHD.
Whether you're constantly paying late fees or losing out on discounts, these small amounts can add up quickly.
How can ADHD affect my bank account?
ADHD can have a significant impact on your financial habits.
The tendency to make impulsive purchases can lead to overspending. Forgetting to pay bills on time can result in late fees and higher interest rates.
Not tracking your spending can lead to overdraft charges when your account goes negative.
You might miss out on discounts and special offers if you forget about them.
All these factors can make managing your finances more challenging, leading to what feels like an ever-growing mountain of financial stress.
What can I do to help my ADHD brain better manage money?
Try budgeting methods until you find one that works for you. Something like Mint may help by tracking purchases automatically.
Whereas a service like Goodbudget may help you by making cash seem more tangible.
Understanding the ADHD tax and how to mitigate its effects can significantly improve your financial health and reduce stress.
There are resources and strategies out there to help you manage your finances effectively, even with ADHD.
Key Takeaways
Managing ADHD is a challenge. When it comes to finances, people need a flexible structure, creativity, and ADHD expertise to make it work.
You've learned how ADHD can lead to extra costs and losses, impacting your wallet more than you might realize.
The key is awareness and taking proactive steps.
Don't shy away from seeking help. Use resources available to you. From financial tools to professional advice, there's support out there.
By being mindful and planning ahead, you can reduce the ADHD tax and take control of your finances.
For more tips on neurodivergent teacher accommodations, read the “Top 10 Essential Neurodivergent Teachers Accommodations” round-up!
