The ADHD tax. Have you heard of it?
Due to executive function challenges, folks with ADHD can lack organizational skills, which can in turn cause them to forget to pay bills. Add time blindness to the mix – “Oh, that’s not due for ages! I’ll worry about it then!” – and working memory issues that impact planning actions, and you have a recipe for the additional costs for goods and services, including late fees and higher borrowing costs due to lowered credit scores, that is semi jokingly referred to as the ADHD tax.
There are other ADHD related factors that impact financial stability. These include impulsivity (buying without forethought), people pleasing (gifts one can’t afford, or purchases to help one fit in or impress), and of course, dopamine seeking (shopping can boost dopamine, tracking one’s money is boring). While these don’t directly lead to the ADHD tax, the less control one has over their money situation, the more apt they are to avoid dealing with it, leading to behaviors that cost us.
If the only impact of the ADHD tax was to our wallets, while it wouldn’t be great, we’d probably just chalk it up to another ADHD problem, like losing our keys or getting lost in a project, and pay the late fees. However, there is more to the ADHD tax than dollars and cents.
The emotional cost associated with feeling financially out of control – for which the ADHD tax is an indicator – can be quite large. According to a 2020 study, ““participants who had difficulty paying bills were more likely to have high levels of depressive symptoms and anxiety compared to those who did not have financial difficulty.” Per a TIAA February 2024 report, 42% of U.S. adults say that money negatively impacts mental health.
Add ADHD to this witch’s cauldron of financial instability, and the emotional impacts increase. Per a study published by The Guardian, “…those with ADHD are twice as likely (76%) to suffer from anxiety linked to their finances compared with the general population (38%).” And even more alarming, according to a 2020 study by Beauchaine et al, “financial distress is associated with fourfold higher risk of suicide among those with ADHD.”
Suddenly the ADHD tax isn’t even remotely amusing.
You may have experienced the negative emotions that accompany the ADHD tax. Feelings of shame and embarrassment are common. One can feel hopeless – why can’t I manage to pay my bills on time like everyone else? And there can be guilt too, especially if others are impacted. These emotions can become cyclical: shame and guilt leading to avoidance of financial monitoring, or the classic “retail therapy” prescription, which can lead to more spending, which starts the cycle all over again.
So what is one to do about this?
There will be those who tell you “just use a budget app.” They may even tout an ADHD friendly budgeting system. However, that app, without any further accommodations and awareness, will sit on the shelf, gathering dust, while the emotional and monetary costs increase.
There are accommodations that can help – autopay, an accountability buddy to keep you from avoiding the issue, dopamine boosting rewards (I’m a fan of the Money Meeting – complete with coffee and cookies – with myself, weekly). If there is avoidance happening, we can dip our toes in by just checking balances for a couple of weeks. If we can afford it, maybe a virtual bookkeeper would help.
But in order for any strategy to work, we need to understand what is driving our behavior. And we need to accept the differences in how ADHD brains work, so that we are willing to stop trying to manage our finances the neurotypical way.
And for this piece of advice…no charge.