Behavioral Finance for Children with ADHD: Teaching Money Management Skills

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Our relationship with money – the way we think about and manage our finances – tends to influence every facet of our lives. Yet most of us avoid talking about money because it makes us feel uncomfortable, which means our children miss the opportunity to understand behavioral finance and develop money management skills. money under our direction.

Behavioral finance and ADHD

More than 60% of adults with ADHD have significant to severe financial difficulties. I learned this from Rick Webster, founder of the Financial Literacy Education Society Rena-Fi.com, who cited a host of root causes such as impulsiveness, job instability, lower levels of education, disorganization, and more.

Parents with ADHD are less likely to model healthy money management skills for their children. Even when parents manage money well, teens and young adults with ADHD don’t learn by observation alone. At some point, they need lessons – and opportunities to apply them.

[Watch: How to Teach Teenagers About Money]

Webster explains that children need to learn more than the mechanics of math; they need to understand behavioral finance, or “why we make the financial decisions we make.” In other words, building budgets is not enough.

How Parents Can Increase Smart Spending

For young children and tweens

  • Start talking about money with your kids before they have it.
  • Raise awareness by discussing the relative costs and value of things in their lives.
  • Ask questions that prompt children to think about their values ​​and goals.
  • When children begin to accumulate money, teach them to separate it into three categories:
    • Save for the future
    • Set aside for expenses
    • Allocation to charities. Start a family tradition of choosing and donating to charities every holiday season.

[Read: Allowance Dos and Don’ts]

For tweens and teens

  • As your children take care of their own savings and expenses, expect setbacks. If they’re spending recklessly (and sometimes they will), talk to them about it. Use mistakes as a chance to learn.
  • Teach children to save and plan a purchase. If a product costs more than expected, do not completely save your children. If you contribute to the costs, ask them to reimburse you.
  • As children grow, teach them about credit. Explain that the borrowed money becomes a debt that they must repay each month.

For college-aged adults

  • If you haven’t already, put your young adult in charge of their money.
  • Work with your child to create a reasonable budget.
  • Encourage them to apply for a credit card and pay off the balance each month by matching spending to savings.
  • Teach them the importance of a good credit score and how to improve it.
  • Encourage them to use an app or spreadsheet to monitor their money – how much they earn and spend, and what they spend it on.

Behavioral finance and ADHD: next steps

Elaine Taylor-Klaus is co-founder of ImpactParents.com. Find more strategies in Elaine’s book, The Essential Guide to Raising Complex Children with ADHD, Anxiety and More and the Mental Health School for Parents, a behavioral therapy training program.


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