Money & Budgets

The ADHD Tax Is Draining — Financially and Emotionally

ADHD exacts financial and emotional costs – sometimes referred to as the ADHD tax – that carry a heavy burden. Use this guide to help you understand the dreaded ADHD tax and learn how to achieve financial wellness after money problems.

By Rick Webster Verified Updated on October 14, 2024
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What Is the ADHD Tax?

“My missed deadlines for student loan payments alone have cost me roughly $50,000.”

“I had to go to the city courthouse for overdue library books. The library books were in the trunk of my car, and they belonged to the library I drove by every day on my way to work.”

“I am years behind on taxes.”

“I waste so much time shopping for groceries that only end up going bad. I waste even more money buying fast food.”

“I feel like I’m a bad person due to my money management failures.”**

These comments from ADDitude readers demonstrate how symptoms and traits of attention deficit hyperactivity disorder (ADHD) — from impulsivity to forgetfulness and even emotional dysregulation — translate to very real financial consequences. It’s why people with ADHD, compared to non-ADHD peers…

  • …are in poorer financial situations and exhibit difficulties with financial decision-making.1
  • …exhibit poorer financial competency and capacity.1
  • …are more financially dependent on family members.2
  • …earn less and attain lower socioeconomic standing over their lifetimes.2 3

Hence the “ADHD tax” – a term that refers to the obvious and hidden costs of living with the condition.

But the ADHD tax isn’t collected in money alone. Other costs associated with ADHD – like constant guilt and shame, compromised relationships, and poor self-esteem – often weigh more and do more damage than any monetary penalty ever could.

[Read: How Do You Pay the “ADHD Tax?”]

The ADHD tax takes its toll, but we are certainly not helpless. (I say this as an adult with ADHD who has paid the ADHD tax far too many times.) We can take steps toward managing the symptoms that cost us the most – financially and emotionally.

How the ADHD Tax Shows Up: Signs & Consequences

You can trace back any time you’ve paid the ADHD tax to one or several of the following ADHD symptoms or traits:

  • Intention-action gap. Russell Barkley, Ph.D., thought “intention deficit disorder” might be a better name for ADHD, as it captures our never-ending struggle to take action on decisions (i.e., failing to do what we know we should do.) We intend to get the car’s oil changed. But we don’t, for whatever reason. Down the line, that neglected oil change becomes a wrecked engine that breaks the bank and/or leaves us carless.
  • Analysis paralysis. Activating on a decision is a big problem, but so is decision-making. It’s a problem that’s often looped in with perfectionism, procrastination, and difficulty prioritizing. Many adults with ADHD, overwhelmed by the decision in front of them, simply shut down and further delay action. Cue mountains of paperwork and unopened bills.
  • Forgetfulness and disorganization. How many times have you been blindsided by a non-refundable charge after forgetting to cancel a trial subscription? (Perhaps you forgot that you signed up for one?)
  • Impulsivity, typically in the form of purchases that aren’t so well thought out.
  • Now vs. not now thinking. Because of time blindness (and related to the intention-action gap), we seriously downgrade the impact our current choices have on our future in favor of instant gratification.

Sure, the ADHD tax shows up in day-to-day inconveniences like spoiled groceries, over-drafted accounts, and late payments. But we mustn’t discount its long-term costs and other hidden, far-reaching consequences.

[Read: How to Spend Less When the ADHD Brain Wants More, More, More]

  • Occupational issues. From job hunting to navigating job interviews and the workplace itself, people with ADHD have trouble with practically all aspects of employment.4 Careless mistakes might overshadow other contributions on the job and affect performance reviews. Social challenges and emotional dysregulation make it difficult to connect with colleagues and manage work-related stress. Rejection sensitive dysphoria might translate to missed opportunities and risk avoidance that could make or break a career. In all, difficulties meeting workplace expectations and keeping jobs make it harder to achieve career advancement – and explain, in part, why adults with ADHD earn less over their lifetimes compared to neurotypical peers.
  • Credit profile damage. Missed payments, high credit card balances, collections, and other factors may tank credit scores, which comes with a long list of disadvantages: high loan interest rates, rejected loan applications (think car, home, etc.), difficulty getting approved for an apartment, and even delayed retirement.
  • Relationships. The stress of financial burdens costs us our connections with family, friends, and other loved ones, which only diminishes quality of life.
  • Self-esteem. Guilt and shame tied to too many encounters with the ADHD tax chip away at our self-worth. You might even dig yourself into a deeper financial hole in an effort to keep up appearances and conceal signs of a problem.

How to Reduce the Burden of the ADHD Tax

Avoiding the ADHD tax altogether might be impossible. (ADHD wouldn’t be ADHD without it.) But a solution-based mindset goes a long way, as do these tips for minimizing the ADHD tax you pay and mitigating its long-term consequences.

1. Get it off your chest. There’s nothing more therapeutic than admitting to a problem and confessing all the ways you’ve paid the ADHD tax. Reflecting on the ADHD tax’s impact on your life will allow you to wake up to your current reality and start on solutions. Ask yourself the following questions to encourage self-reflection:

  • On a five-point scale, with five being the most painful, how much pain has the ADHD tax brought to my life?
  • What are my primary emotions related to the ADHD tax? Guilt? Shame? Blame? Anger? Frustration?

It feels even better to share your ADHD tax defeats and triumphs via support groups like those organized by ADDA and CHADD. RenaFi, my financial wellness company, holds classes, expert presentations and group coaching for people with ADHD.

2. Start small. You can dig yourself out of the ADHD tax hole, no matter how deep it is, one small, consistent step at a time. (“Slow down to move faster” is my motto.) Think:

  • Where do I pay the most consistent ADHD tax? Spoiled groceries? Replacing lost belongings? Late fees?
  • What is one thing I can change or tackle right now?
  • What will help me change? An accountability partner? Setting up automatic payments? Revisiting my grocery list and shopping habits? Meeting with a credit counselor? Deleting a shopping app?

3. Bridge the gap between “now” and “not now.” The gap between intention and action is behind so many of our encounters with the ADHD tax. Whether you feel an urge to impulsively spend or delay on a time-sensitive decision, ask yourself the following questions to connect to your future self:

  • What would my future self think of this decision? (Or non-decision?)
  • If I continue to avoid acting, what opportunities will be taken away from me?
  • If I act now, what opportunities will be available to me?

4. Embrace discomfort to beat paralysis. Procrastination has more to do with difficulty regulating emotions around a task than it does with time-management. Getting yet another letter from the IRS, for example, understandably strikes fear. But rather than add it to the pile of unopened notices in a bid to avoid negative feelings, allow yourself to feel uncomfortable. Open the letter right away. Chances are, the letter will say you owe X, and offer next steps.

Think of discomfort as an alarm alerting you to worse outcomes down the road. It’s a warning to act on discomfort before excruciating pain (perhaps in the form of an IRS levy) acts on you.

Often, it’s the rustling in the bushes that creates more anxiety than dealing with what’s in the bushes head-on. You’ll find that one easy step leads to another. Before you know it, you’ve stepped out of paralysis and into action.

This mentality can also help you prioritize and cut down on overwhelm. Last year’s IRS letter at the bottom of your unopened mail pile might be a moot point today.

5. Optimize your ADHD treatment and management. If ADHD is truly causing difficulties in your life, then take ADHD seriously.

  • Have you been competently and fully diagnosed? Are you on the best possible medication and dose?
  • ADHD rarely travels alone. Could you have a co-occurring condition, like anxiety or a sleep disorder, that may explain some of your challenges?
  • Could you benefit from seeing a therapist?
  • Could an ADHD coach help?

6. Create an ADHD-friendly environment. Strive to lead a lifestyle that works for you. (This won’t happen overnight.)

  • Develop habits, routines, and systems that decrease your chances of brushing up against the ADHD tax. (See #2 above.) Aim for simplicity.
  • Take a hard look at other facets of your life – from your job to your social circle – that aren’t serving you.
  • Don’t forget about the essentials crucial to a well-lived life: nutrition, exercise, sleep, and stress management

Get RenaFi’s free ADHD tax worksheet for even more strategies.

ADHD Tax and Financial Wellness: Next Steps

The content for this article was derived, in part, from the ADDitude ADHD Experts webinar titled, “The ADHD Tax: How to Avoid the Late Fees & Other Costs of Forgetfulness & Impulsivity” [Video Replay & Podcast #419],” with Rick Webster, which was broadcast on August 30, 2022.

**Quotes are from webinar attendees, and were edited for length and clarity.

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1 Bangma, D. F., Koerts, J., Fuermaier, A. B. M., Mette, C., Zimmermann, M., Toussaint, A. K., Tucha, L., & Tucha, O. (2019). Financial decision-making in adults with ADHD. Neuropsychology, 33(8), 1065–1077. https://doi.org/10.1037/neu0000571

2Altszuler, A. R., Page, T. F., Gnagy, E. M., Coxe, S., Arrieta, A., Molina, B. S., & Pelham, W. E., Jr (2016). Financial Dependence of Young Adults with Childhood ADHD. Journal of Abnormal Child Psychology, 44(6), 1217–1229. https://doi.org/10.1007/s10802-015-0093-9

3 Barkley RA, Murphy KR, Fischer M. ADHD in adults: What the science says. New York: Guilford Press; 2008.

4Adamou, M., Arif, M., Asherson, P., Aw, T. C., Bolea, B., Coghill, D., Guðjónsson, G., Halmøy, A., Hodgkins, P., Müller, U., Pitts, M., Trakoli, A., Williams, N., & Young, S. (2013). Occupational issues of adults with ADHD. BMC Psychiatry, 13, 59. https://doi.org/10.1186/1471-244X-13-59