ADHD & Managing Your Money

Are you managing your money, or is it managing you?

We are often in a hurry to drill down into the details of managing money because we are being forced into a hard place, or because someone told us we should.

Perhaps our approach should be proactive instead of defensive or even offensive.

However, without addressing the foundational aspects which are the behavioral aspects, all of our well laid logical plans might as well be built on sand.

I talk about beliefs in this article about ADHD and finances if you want to read that first.

Let’s talk about some of the mechanical aspects of money management.

4 Practical AND Actionable Steps To Manage Money

and Overcome Financial Pitfalls

1 – Emergency Fund Preparation  

Actionable: Set aside $1,000.00 in an immediately accessible “demand account”

First and foremost, understand that small problems will become huge problems if you’re not prepared.

It’s not “if.” It’s “when.”

A car repair you can’t afford becomes an impediment to getting to work, to getting your kids to school.

A traffic ticket you can’t handle will double or triple in cost if you can’t pay it in a timely fashion.

A visit to the emergency room leaves you short on this month’s rent.

This is how people fall victim to predatory paycheck lenders. Prepare for the unexpected because the unexpected WILL happen.

Save a thousand, and set it aside. Don’t touch it. If you find you need it for an emergency, use it but be sure to replace it ASAP.

Be sure you have defined what an emergency is prior to an emergency. These are things your life depends on.

2 – Income Interruption Preparation

Actionable: Accumulate three to six months worth of expenses

Just because your current income is enough to service your expenses doesn’t mean it always will be there.

People get laid off.

People switch jobs with a gap between. Contract workers have gaps of varying lengths between gigs.

Keep it in a stable semi liquid form. The smaller your reserve, the more conservative you’ll want to be.

Three months worth, for example, you might want to keep in the bank or in treasury bills.

Six or more months worth, you might be well served to brave some risk to your principal make a conservative investment. This would give you a option to earn, and yet could still be turned into cash in under a week if needed.

I suggest continuing to add to your expense reserve beyond the commonly recommended three to six months worth. If you never need it, GREAT. It will just add to your retirement funds.

Keep in mind, that if you’re living through a systemic problem (For example, the subprime era meltdown of 2008, or COVID-19) that your ETF or other equity investment will likely lose value at the very time you need it.

Hence, keep adding. The more you accumulate the more latitude you have.

In deciding just how much is safe enough, consider the reliability of your income and the flexibility of your expenses.

How long would it take you to land another job, and how much could you cut your expenses over a short period of time?

Do you have family members who depend on you now, or who will likely need your help in the event of a system wide failure?

Who would you want to help if you could?

The whole point to the expense reserve is to make it through hard times with as little damage as possible.

Don’t rely solely on your credit lines to be your emergency and expense reserves.

During tough economic times, such as these, those credit lines get pulled back by the lending world. Credit limits can be decreased or eliminated all together at the sole discretion of your lender.

3 – Fully Fund Your Retirement Plans

How long do you expect to keep working? How much will you need on a monthly

Keep in mind that in retirement many of your expenses will decrease. Some may increase. Your kids will probably be flying on their own by then. You might downsize your housing. You might move to a less expensive area. You might only need one car. Perhaps you won’t need a car at all.

On the other hand, you might wish to opt for medical services that your insurance won’t cover. You might have an increasing need for caregivers, delivery services, or home maintenance workers.

Many financial people recommend ideas like the “4% rule,” which I won’t go into here, to provide enough money for 25 years of retirement.

My recommendation? Plan on living forever. Not really, but plan on your money lasting forever.

If you accumulate enough to live off of the yield, then you won’t be digging into the principle.

If you start early and put enough aside consistently, this is not an unrealistic goal for most people.

If that’s not possible or practical, then do what you can. Any effort now will pay dividends (literally) later.

Invest your retirement funds wisely. Emotional gyrations have no place in your investment portfolio. Invest wisely and hold generally. Invest in what you know.

If you know tech, then consider investing in tech securities. If you know real estate, then consider investing in the real estate sector.

Diversify but don’t diversify too much. NEVER invest retirement funds into private offerings you don’t fully understand.

If you feel you’re behind the curve without enough time to accumulate what you need, do not attempt to make up ground by taking emotionally driven risks to increase your portfolio yield.

Instead, consider ways to further reduce your expenses and to increase your take home pay. These days there are many opportunities for earning a side income in the gig economy

4 – Increase the Gap

As your income increases over the years, keep your expenses low. Whatever that gap between income and expense is today, strive to increase it by next year.

Ideally, over a period of years, you’ll get to the point of living on less than fifty percent of your income. This is not as hard as you might think.

If you get a raise, resolve to live on half of it. The rest, invest wisely. If you pay off a car loan, don’t run out to buy a new car. You don’t have to live a life of deprivation but simply one of moderation.

Due to the exponential nature of growth, moderation now will pay off handsomely in future years. And not necessarily that long from now.

Many people are retiring early with plenty set aside sunk into income producing investments. It’s not rocket science and it doesn’t require

Money Concepts to be Skeptical Of

Cash Only


Buy/order/purchase concerta tablets 18mg 27mg 36mg 54mg with imprints alza from a genuine online pharmacy without prescription and overnight delivery

Leave a Reply