Main content

Living for the (costly) moment

Adulting. It’s rough. Everyday life requires an inordinate amount of self-control, discipline and the ability to pay attention, even to the most mundane of tasks.

Employers expect you to arrive to work early, prepared and ready to deliver results. Family members trust you will keep track of schedules, maintain relationships and stay engaged. Creditors assume you will manage your finances well enough to pay bills on time.

But what happens if you struggle with focusing, organization or delaying gratification because of a mental impairment such as attention deficit hyperactivity disorder (ADHD)?

Adults with the brain disorder, which is characterized by inattention, hyperactivity and impulsivity symptoms, often struggle with financial decision making, according to a 2017 study published in PLOS One.

“There is a strong correlation between ADHD symptoms and paying late fees, paying overdraft fees, and switching jobs often,” said Itzhak Ben-David, a finance professor at Ohio State's Fisher College of Business.

Ben-David and study co-authors Theodore Beauchaine, an Ohio State clinical psychology professor, and Aner Sela, a University of Florida associate professor of marketing, analyzed self-reported data from 544 adults with an average age of 35.  

The researchers took a more comprehensive look at the connection between ADHD and financial decision making — not aiming to solve these challenges, but to shed light on a population with an impairment, Ben-David said.  They expanded prior research that painted a grim picture for adults who have the disorder.

Once thought of as a childhood disease, ADHD can interfere with life well into adulthood. Adults who were diagnosed with ADHD as children report high drop-out rates, underemployment, compromised job performance and difficulty maintaining friendships. Previous research found they are also prone to impulsive and risky behaviors including substance abuse, self-inflicted injury and suicide attempts.

“There are many studies about kids who are school aged, but these kids eventually become adults,” Ben-David said. “As a researcher, I was really curious to know how they manage their financial lives.”

This risky behavior extends to finances. The researchers found that ADHD symptoms were associated with making late credit card payments, carrying debt and credit card balances, and borrowing money from high-interest rate lenders such as pawn shops and payday loan offices.

The poor financial choices stem from the impulsive nature of ADHD, rather than inattention, according to the study.

A person who has impulsive symptoms makes hasty decisions in the moment without thinking them through or has a desire for immediate rewards due to an inability to delay gratification, according to the National Institute of Mental Health.

Impulsivity is not an issue of intelligence, but a matter of cognitive impairment, Ben-David said.

“People with ADHD live in the present and react to short-term stimuli,” he said.

Although gratifying today, impulsiveness, which is called delay discounting or present bias in behavioral economics, can cause financial strain later in life. The study finds that individuals with ADHD symptoms indeed exhibit delay discounting: when asked to compare payments today to payments in the future, they showed strong preference for payments today.

In order to combat this tendency, Ben-David recommended people who exhibit impulsive behaviors automate payments to avoid penalties such as high credit card interest rates. He also suggested using short-term incentives to drive positive behavior, because adults who have the disorder respond well to immediate rewards.

“Start your day with short-term benefits that reward short-term behavior,” he said. “For instance, if you go to the gym then you can have a delicious protein smoothie. This will motivate you to go to the gym.”