How to Avoid Paying the Financial “ADHD Tax”

I officially got diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) at age 30, though I’ve wondered many times how it didn’t happen when I was 5-years-old. My kindergarten classroom was joined with the neighboring classroom at the back, and shared the same bathroom. I was constantly wandering into the other classroom, daydreaming, drawing, or talking when I should have been listening. Throughout all my schooling years, I struggled to focus on studying, never did my homework on time (instead, opting to hurriedly complete it in the break before class), and was entirely concerned with social opportunities over learning. Luckily, I always had just enough short-term memory cram skills to get by, though I failed anything requiring more dedicated study, including all the AP tests I took (besides studio art!). 

Though my diagnoses came later in life, I’ve found it amusing in hindsight how many other ADHDers I’ve connected with and strongly related to, including many good friends over the years and my ex-spouse. Through these relationships, I have realized that although there is much I relate to, I believe I have a milder dose of ADHD. Perhaps it’s just the anxiety counteracting some of the symptoms, but I’ve usually been able to plan for (read: obsess over) the future more than many of my ADHD counterparts. So much so that I became a financial planner, and have continuously attracted ADHD clients to my practice. 

In working with my ADHD clients, and in my own life, I have certainly noticed several common threads: important behavioral changes are particularly difficult, there’s a stronger disconnect between the present and future self, and extreme overwhelm often leads to inaction, even when action is absolutely essential. I consistently see a significant range of negative financial factors for these clients, including: 

• Carrying higher-than-average debt. This is often due to impulsive spending, unplanned purchases, and lack of savings to fall back on in emergencies. 
• Disorganized finances. Not knowing how much money there is, where the money is, or how much debt is being carried, what the interest rates are, etc. 
• Paying more fees due to missing payment deadlines or maxing out credit cards. 
• Lower credit scores due to missing payments or high spending vs credit limits, 
• Minimal-to-no retirement savings, general difficulty planning for their future selves. 
• Not filing taxes, at all, or on time, resulting in excess interest and penalties. 
• Avoiding meeting with me (or other financial professional) out of shame, embarrassment, or overwhelm. 

All of this often falls under the umbrella of “The ADHD Tax,” the colloquial term for the negative financial (and emotional) impact that ADHD can so often have on individuals. 

For my clients, I’ve repeatedly seen a vicious ADHD Tax cycle unfold: repeated impulsive spending (for example), accruing debt, leading to feeling overwhelmed and ashamed about finances, then eventually deciding to hire a financial professional for help, getting motivated and hopeful about change, making improvements, but then slipping back into old spending habits, which leads to feeling ashamed, avoiding said financial professional, continuing maladaptive spending behaviors, feeling more ashamed and more overwhelmed, then getting to a breaking point where they finally resurface to meet with financial planner, explaining their actions (and often, their shame surrounding these actions), a recommitment to change, making improvements, and so on. 

Don’t get me wrong – there is absolutely progress made, particularly in the long-term, but my ADHD clients tend to make that progress much more slowly than average, and with a lot more steps backward that have to be recovered from along the way. It’s occupied a lot of my thoughts, particularly when one of my clients last-minute cancels our meeting, or we have one of those “resurfacing” meetings that feel a lot more like a confessional, no matter how much effort I put into making the conversation judgment-free. 

‍So what are the solutions? 

‍When it comes to Debt Management:

• Autopay: This is an absolute MUST. At the very least, having autopay set up for the minimum payment on ALL credit cards is essential. It’s ideal to set up autopay for the full statement balance to avoid interest charges, but at least paying the minimum will help you avoid the worst consequences to your credit score. This also prevents paying those additional late fees. 
• Visibility and clarity: This can be done solo, or with a financial pro, but it is important to understand which debts are causing the most damage, in the form of interest paid, fees, and/or credit score impact. I like to list out all the debts (on a spreadsheet, but it can be on paper), the balance, the minimum payment, and the interest rate. When I have a check-in meeting with clients, we make a copy of the sheet to track progress over time. 
• Consolidation: This isn’t always the solution, but for many people, condensing debts into one place with one payment is significant in reducing overwhelm. It’s often helpful for this to be an installment loan that can’t be added to. Until it’s paid off, I usually recommend avoiding credit cards, even going so far as to shred them all until they can be used more responsibly. 

When it comes to impulsive spending: 

Budgeting apps, particularly ones that send notifications, that have a good interface, or that gamify budgeting. My favorites for this (and for general features and functionality) are Monarch Money and Copilot. I also think digital envelope methods can be helpful (like Qube Money).

• Bonus points for setting a weekly reminder to update the budget app.
• Extra points if you have a partner and you include them in the process. 

Creating barriers between you and your money:‍

• Move most of your money to a different savings account than your main bank.  
• Deleting apps that encourage you to spend impulsively (I’ve seen everything from clothing apps to social media to games to food delivery to Amazon). Entirely removing these from your phone, even for a period of time while you reset some habits, can be hugely impactful. 

Accountability partners:‍

• Tell your coworkers you’re trying to bring lunch from home more often – see if any of them will join you! 
• Ask your friends to help you stick to a clothing budget. 
• Share with a financial coach/planner what you’re most struggling with spending money on. Set a short-term goal at first, then over time, revisit and adjust as necessary.

When it comes to disorganized finances: 

• Budgeting apps (again). These are a central place where you can see all your accounts. It’s huge in understanding your financial situation. 
• Consolidating accounts where possible. Moving old retirement accounts to one place, closing down unused savings accounts, even balance transferring debt and discontinuing use of certain credit cards can be helpful. 
• Document management. Have a folder for physical documents. Create a digital folder for digital documents. Always put your financial documents in their homes. 

When working to improve credit scores:

• Autopay, as discussed above. 
• Working with a pro to come up with strategies that might work for you (i.e. consolidation, etc.). 
• Temporarily discontinuing use of credit cards in favor of cash or debit cards. Even just reducing use to one credit card has been helpful for my clients.  

When concerned about minimal-to-no retirement savings: 

• Automation: If you have access to a 401(k) through work, setting up an auto-contribution of even 1% of your salary is a great place to start. 
• Visualization & journaling: For a lot of people, there can be a significant disconnect between their present and future selves. Often, the solution to not planning or saving for your future self comes from that disconnect. I recommend a visualization exercise for this; picturing your financial success can help align your subconscious with your goals. Try sitting down and writing a letter to your future self. Imagine that you’ve achieved the financial goals you’d like to accomplish. Tie specific timelines and dollar amounts to these. Imagine what your future self is doing, how you feel at that point in time, and how grateful you are to your past self for making good decisions today!

When you have trouble filing taxes (or filing on time):

• Set yourself an annual recurring calendar reminder for Feb 15. At that point in time, determine whether you’re going to use a filing software or hire a pro. 
• If you’re going to DIY it, challenge yourself to simply log in and upload your W2. The following weekend, spend another hour on it, and so on. You should be done before the deadline! 

When avoiding meeting with me (or other financial professional):

• This usually stems from shame, embarrassment, or overwhelm. But try to remember: we’re here to help! The reality is judgment won’t help you make long-term progress, and any advisor who treats you this way might not be a good fit for you. 
• Remind yourself: you’re paying for financial services to help your situation. You’re not expected to be perfect today, you’re on the path to improving your financial life. 

Everything I’ve read and experienced when it comes to ADHD tax provides a lot of practical advice, and I’ve usually tried to tackle things from this angle. While I think all of those practical steps deserve being included here, I wonder if the biggest barrier comes from the financial shame that is so commonly experienced by individuals with this diagnosis. If that’s the root of it, then solutions and change are more likely to happen when conversations about these struggles happen more openly and honestly. It's important to remember that seeking support, whether through professional advice, therapy, or community groups, can make a substantial difference in managing ADHD and living a fulfilling life.