This video provides tips that can make the task of managing your personal finances less seem overwhelming.
Video Transcript
Hi, I’m Mike Testa, The ADD Advisor. In this video I discuss year-end financial planning tips for adults with ADHD.
ADHD adults often struggle with financial planning activities because they’re unclear about what they need to do and how it should be done. These simple steps can make the process easier.
Step One: Review past performance.
Don’t over-complicate this step. Just think about the last 12 months and ask yourself, “Did I save and invest money like I wanted to?” If not, why?
If you did invest, did your investments perform as well as you thought they would? If you don’t have a plan in place, you’ll need to build one around your financial goals.
Step Two: Review your financial goals, or if you don’t have any, create some.
Financial goals don’t need to be complex, but they do need to be quantifiable, measurable, and include an expected target date. As ADDers, we tend to think in abstract terms, so we want to make these goals as clear and concrete as possible.
Step Three: Prepare a basic budget for the upcoming year.
ADDers hate budgets because they’re boring and they feel restrictive. The way around this is to build a simple, flexible budget that accounts for the way you spend your money now.
Again, this doesn’t have to be complicated. Simply list your main income sources, followed by your main expenses, and then estimate annual amounts for each item on your list.
If you know that every month you end up making $300 of impulse purchases, build that into your budget right from the start.
Having a budget allows you to anticipate and address financial issues before they become problems. And with a plan in place, you’re less likely to spend impulsively. You can download a simple “fill in the blank” budget-building form from The ADD Advisor website.
Step Four: Review beneficiary designations.
Take a look at the beneficiary designations for life insurance policies, retirement accounts, and your will. Update these documents as needed so they reflect your current intentions.
Adults with ADHD have a tendency to change jobs frequently, and they also experience higher rates of divorce—both of these factors increase the likelihood that you’ll have documents that need to be updated.
Step Five: Gather tax documents in one location.
Set aside a shoebox or a single manila folder to store things like W2s and 1099s until you need them. Each time you receive a new form or statement in the mail, stick it right into the shoebox.
This simple act can go a long way toward reducing the sense of chaos that often surrounds tax time, and it makes it easier to pass everything off to a CPA, if you need to.
Step Six: Automate routine tasks.
ADDers have trouble carrying through with tasks they deem boring or confusing — so automate these items, so you don’t have to stress over them.
Your employee benefits office or your IRA custodian can set up payroll deductions that allow you to easily—and consistently—fund contributions to an IRA or 401k plan.
And your bank can help you automate the process for paying your bills. This can be an effective way to eliminate late fees and ensure the lights stay on.
That’s all for now, so be kind, take good care of yourself, and reach out to me if you need a little help.
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