How ADHD can lead to debt

One of the pillars of ADHD is impulsivity. And while in children that may manifest as being loud, disruptive, and annoying, for adults, it can affect finances.

Impulsivity can make it difficult to budget because there’s always something you just must buy. And the inability to budget can lead to consumer debt, which can be compounded by impulsively making large, unaffordable purchases.

For example, when I was 16, a friend convinced me to buy his entire comic book collection for $100. When I was 18, a salesperson talked me into buying an encyclopedia set for $2000. When Mary and I were newlyweds, we were talked into buying a computer course (which came with a computer), a year gym membership, and a year’s supply of food (including a deep freeze), all of which was financed through high-interest loans, one of which was over 30%. (We were also talked into buying a condo that wasn’t even built yet. Luckily, we changed our minds on that one the next day.)

We impulsively moved to Lethbridge for school three years into our marriage. That impulse exacerbated our financial situation because I didn’t meet the residency requirements for Alberta student loans, which meant the federal loan of $5,000 had to last for 12 months, and had to cover tuition and and all living expenses.

Nearly a decade ago, when I was laid off, we impulsively started a business, taking out a line of credit to pay for $10,000 in inventory, a $1000 website, and a $2,500 computer. Poor revenue prompted us to increase the line of credit to $40,000, money we’re still paying off.

Add on top of that various credit cards over the years, and it’s easy to see how impulsivity has unequivocally affected our financial life.

The key to keeping impulses under control is through a budget. It seems counterintuitive, but there’s no way around it. Knowing how much money you have coming in and how much you need to live is the only way to keep on top of impulses.

Our budget is pretty granular and one we developed over a few years through trial and error. A typical monthly budget didn’t work for us; we found that we spent all of our budget too quickly, leaving us too little money by the end of the month.

So we created a weekly budget. We know how much we have coming in each week and how much we have to spend each week. Even then, for some things, it’s just not enough.

For example, I do virtually all of the grocery shopping. I buy groceries three times a week. To stick to the budget, I have to divide the weekly budget amount by three and stick to that mini budget for every visit to the grocery store.

We spend about $1200 per month on groceries. That works out to $300 per week and $100 per visit.

Even with the mini budget in place, I still need to track how much I’m spending as I shop throughout the store. I just keep a running total on the calculator app on my phone. When I get close to $100, I stop. I try to prioritize my list so that the most essential items are in my cart, and purchasing of less essential items is postponed until the next visit.

I must stick to this though. It takes commitment. It can be a challenge, especially if I’m hungry and I pass the snack aisle.

Having a budget and sticking to it is the best way to keep regular spending under control. It also helps you know whether you can afford larger purchases (like new appliances or another vehicle).

If you’re struggling with impulsive purchasing, try a budget. There are lots of free resources out there to help you get started. And it’ll make a huge difference.