David DeWitt is a Certified Financial Planner living with ADHD and joins us today to walk through some of the challenges of building — and sticking to — a holiday budget with ADHD.
But that’s not really the whole story. David takes us on a tour down history lane. It’s a tour that starts — and ends, actually — with the concepts around envelope budgeting, a classic in the budgeting universe that focuses on categories and cash. Well, we’re note using cash anymore, but the idea of building your budget in a way that allows you to track what you spend, when you spend it, and keep your credit intact is central to budgeting for the ADHD brain.
And that helps us to figure out where our impulsivity is taking hold, where it might not be healthy, and where it might be costing us a bunch of money. And when is that important? When our patented hyper-generosity is on edge: The holidays.
- DeWitt Capital Management
- ADHD Money Talk with David DeWitt
- ‘The ugly truth behind your fancy rewards credit card’ — Emily Stewart, Vox
Episode Transcript
Brought to you by The ADHD Podcast Community on Patreon
Pete Wright:
Hello, everybody and welcome to Taking Control: The ADHD Podcast on TruStory FM. I’m Pete Wright and I’m here with Nikki Kinzer.
Nikki Kinzer:
Hello, everyone. Hello, Pete Wright.
Pete Wright:
Oh, Nikki Kinzer. We’re moved out of our technology. Are you relieved? We’re not talking about tech anymore.
Nikki Kinzer:
No, I’m not relieved. I learned a lot.
Pete Wright:
That’s good.
Nikki Kinzer:
I learned a lot in the last three episodes that we’ve been talking about tech, so no, they were great.
Pete Wright:
I’m glad. I’m so glad. In fact, it’s kind of a lie I say that because we’re moving into money for the next couple of episodes and we’ll be talking about budgeting and impulsive spending today with a fantastic guest, certified financial planner, David DeWitt. And then next week we’re going to be talking about using some tech. We’ve got the founder of YNAB on the show next week. So we’ve got some good, I think, ideas for handling impulsive spending and tracking your cash over the holiday season. Some of it might be hard to hear. I’m just saying.
Nikki Kinzer:
Yes, I agree.
Pete Wright:
There was a little bit of stomach churning having this conversation with David.
Nikki Kinzer:
Yes.
Pete Wright:
So very excited about it. But before we dig in, head over to takecontroladhd.com to get to know us a little bit better. You can listen to the show right there on the website or subscribe to our mailing list and we’ll send you an email each time a new episode is released. You can connect with us on Facebook or Instagram or Pinterest, Take Control ADHD. And if you really want to connect with us in real time, head over to the ADHD Discord community. It is super easy to jump into the general community chat channel. Just visit takecontroladhd.com/discord and you will be whisked over to the general invitation and login.
If you’re looking for a little bit more, particularly if this show has ever touched you or helped you understand your relationship with ADHD in a new way, we invite you to support the show directly through Patreon. Patreon is listener supported podcasting with a few of your dollars every month. You help guarantee that we can continue to grow this show, add new features, and invest more heavily in our community. Visit patreon.com/theADHDpodcast and Patreon P-A-T-R-E-O-N.com/theADHDpodcast to learn more. Nikki, we have news.
Nikki Kinzer:
We do. We have an advertisement.
Pete Wright:
Hallelujah.
Nikki Kinzer:
Yes, something big is happening. GPS, my membership program around planning and scheduling and task management. GPS stands for Guided Planning Sessions. Enrollment opens on December 7th and it closes on January 2nd. So that’s important to know because I don’t offer this. It’s not an ongoing open enrollment. I do it only a couple times a year. And GPS is a wonderful membership program. If you’re looking for some guidance on how to manage your task managers, how to get things done, how to do time blocking, calendars, all of that stuff. We do a lot, a lot.
Well, that is what we do. That is what we do. It’s all about planning and we have great benefits with the GPS membership. So I definitely want you to go visit takecontrolADHD.com, click GPS and you’re going to learn more about how it’s set up. All of the wonderful benefits. Just to give you an idea, GPS members have their own membership website. We have our own happy hour. We have an online community on how we can talk to each other in between sessions. But one of the things that I think really makes GPS different than other coaching groups and programs is that there’s two days a week, Mondays and Thursdays that we come together and we do the work.
We’re doing the planning. We’re not talking about it. I’m not teaching you anything. You’re doing it. And that’s what makes it really special is you’re doing it with me, you’re doing it with other people and you’re having that extra support. So if you are interested in GPS, please check it out. Again, it opens on December 7th. It closes on January 2nd. If you happen to be listening to this announcement after those dates, that’s okay.
Put your name on our waiting list because I have a waiting list on there on the website and the people that are on the waiting list, they get notified first when GPS opens. So if you’re on the waiting list now, you’re going to be getting an email here pretty soon, me inviting you to the GPS membership. So it’s important. Put yourself on there if you want to be a part of it next time. There you go.
Pete Wright:
All right. All right. I like that news, Nikki. Well done.
Nikki Kinzer:
Thank you. Thank you.
Pete Wright:
Shall we get David?
Nikki Kinzer:
Yeah.
Pete Wright:
David? David DeWitt is a certified financial planner and podcaster behind ADHD Money Talk. He helps adults with ADHD take back control of their money. After his own ADHD awakening, he set out to build a financial planning model that works for ADHD brains. Now, he’s on a mission to help as many ADHD’ers as he can. He’s with us today to help us through the high holy spending season that is Christmas without breaking the bank. David, welcome to The ADHD Podcast.
David DeWitt:
Thank you so much for having me. I’m pumped to be on this. I’ve listened to you guys a few times in the past and it’s a great entertaining show.
Nikki Kinzer:
Thank you.
David DeWitt:
Happy to be here.
Pete Wright:
Well, thank you. So now you know where the bar is if you’ve listened to the show. And our job today is to just rise above it. And how hard could that be when we’re talking about something that is so central to so many ADHD brains.
Nikki Kinzer:
So many people want this.
Pete Wright:
Money.
Nikki Kinzer:
Yeah. Huge factor in people’s lives for sure.
Pete Wright:
Okay. So David, give us… By way of just a brief intro, you’re a CFP. Tell us about your work, what the CFP means for people so they kind of understand what the kind of work you do and how’d you become a real numbers head?
David DeWitt:
Sure. Numbers head, yeah, that’s funny because I was really bad at math in high school, but I figured it out eventually. I was interested in finance, like stock picking and all that stuff. My dad is a financial planner, but he’s much more in the old school stock picking thing. And then he hired me and I didn’t really know what I was doing for five years. And then I realized I have ADHD. Well, actually, I knew already that I had ADHD, but I read some books and was like, “Oh wow, no one told me about all this stuff.”
So then I was like, “Let’s do this for people with ADHD. So I went down the financial planning path, which is where the industry should be right now is financial planning, which is different than just investing.” And so it got CFP, started doing it ADHD’ers and it’s been really a blast. So CFP is certified financial planner. It simply means someone who has a CFP, it means that they’ve spent a year or two studying for a big, long six-hour test that covers topics from investments to estate planning to tax planning to insurance, to just general cash flow and all the whole, every corner of financial life and even the psychology of financial planning is the newest thing that they’ve introduced into their curriculum. So it’s the gold standard for financial planners and so I have it. I at least rise above that bar.
Nikki Kinzer:
You got that going for you. Absolutely.
David DeWitt:
Yeah.
Pete Wright:
Which is nice. Okay, so transitioning to the ADHD brain and money. This is the thing that we were talking before the show and I told you I’ve struggled with money, I feel like all my life because of the sort of out of sight, out of mind. And look what’s insight is credit card. I’ve been through the ringer with credit card debt twice. I’m 50 now.
Nikki Kinzer:
Yes, you are. Welcome to the club.
Pete Wright:
I feel like I have it under control now, but not without a lot of a lifetime of just struggle and handwringing. And so I want to know what I’ve been missing. How is it that the ADHD brain should be relating to money in a way that might help us be better tuned so that my life can only serve as a warning for others?
David DeWitt:
Yes. The earlier that you come to understand the importance of what money is going to do for you over the long haul of your life and understand it to a point where you’re feeling it deeply so that it overpowers the everyday things that we go through, the impulsive spending, the retail therapy. And that is by far the biggest issue that I see with people that come to me is the spending. They just have no clue of where their money is going.
They’ve been making more money, more money, but they just keep spending it, keep spending it, keep spending it and they just don’t know how to get control of it. And so coming to the understanding of why. Why should I even bother with getting my money? I’m buying things I like. I feel bad about it. Why do I feel bad about it? There’s so many questions that need to be answered. So you can get grounded in a place where it’s like, “Well, the reason why I’m going to put more time and effort into this is because I want to build a family and have kids that I want to protect them. I want to have security. I don’t want to have stress every day of my life.” And this is more important than going on Amazon and getting a dopamine hit.
Nikki Kinzer:
Well, and it’s interesting because I think about the holidays that are coming up and it’s an expensive time if you’re buying gifts for people. It’s so easy to get the credit card out and just think, “Okay. Well, I don’t have the money. I don’t have all the extra money available to buy all of these gifts.” So the natural tendency is to put it on the credit card and then in January you get that big credit card bill and now you have this guilt.
Like you said, it’s a dopamine hit to buy the gift. And then there’s this huge guilt when you see the bill. And something that came to me when you were talking is what a gift it would be to not be receiving that credit card bill. The gift for me would be to not have to buy you something outside of my means.
David DeWitt:
A hundred percent. Doing money well is one of the ultimate forms of self-care because money is kind of like a thing that treats you back. It’s a human almost. If you treat your money like crap, it finds a way to treat you like crap. It brings in lots of areas into your life that are very bad, ranging from just everyday minor stress and worrying about how much money you have and relationship little arguments to the worst case you get laid off, can’t find a job and you have no savings at all. So really bad things start happening in your life.
So the better you treat money, understand that you have money because you earned it. You worked hard for it. It is important that you treat it with the due respect. So keep it. Keep more of your money. Just keep it. It protects you if you keep. It saves you from a lot of pain. And so you just need to realize that you got to take… Just like they always say, take care of yourself first. Take care of yourself first before you go spending lots of gift. ‘Cause another big thing that I find… I’ve had hundreds of conversations this year with people and impulsive spending and excessive generosity is a big thing that I find. And a lot of times it’s this feeling of… A lot of times when we dig down deeper, it’s kind of a thing where it’s like, “I trust you more with this money than I trust myself with it, so I should just give it away.”
Pete Wright:
I haven’t looked at it with regard to the trust piece, but when you said excessive generosity, I feel like for me that is, I am not good at so many things for you, unnamed person, but I know I can do this. I can buy a gift in a way to absolve me of any other shortcomings that I may have in our relationship. And that is if I miss deadlines, miss meetings late from dinner, whatever it is, at least I can pull out the credit card and make it right in my head by way of excessive generosity and gift giving. I wonder how much… Is that a trait that you’ve seen described elsewhere or am I a lonely island?
David DeWitt:
Just think of the times when you know you shouldn’t be buying something but you are anyways. There’s always that deep in your stomach that you know this is not what I should be doing, but it’s solving this issue now that gives me that temporary relief that buys me an extra few days. But you know deep down there’s like this thing building this blooming, when will I get this done? When will I figure this out? For me, it always comes down to just the fact that thinking beyond just a week is hard and you have to really paint the picture of whatever motivates you.
If rewards motivate you paint the picture of in vivid detail of what life will be like when you have a strained out. And if fear motivates you, then paint in vivid detail the pain you would go through if the worst case thing started happening. A lot of times it’s just that trade off. Is it better to protect myself long term or to solve this immediate problem? And with the gift giving, it’s a big one. It’s a big one.
Nikki Kinzer:
It almost feels like what you’re talking about, Pete, I feel like that’s just a bandaid over something that’s so much deeper. I mean what I go to, and this is probably a strange thing to have to talk about, but when someone has an affair and then the other partner who had the affair is like, “Oh, I’m so sorry. I’m going to give you this beautiful new ring or let me buy… Forgive me and let’s buy the house that we’ve always wanted.” I know that’s a weird place to go, but it almost feels like-
I’m wondering how that came about.
David DeWitt:
But it kind of feels like that like, “Oh, I can buy you this so that you forgive me or that you accept me.” There’s such a bigger issue behind that it doesn’t. When you sit back and look at it doesn’t make sense.
Pete Wright:
I want to get to it because all of this I think ties directly into how we manage the way we think about money going into the holiday season. But I know that you have put together in terms of the work that you do with your clients, a way to think about money that works for ADHD folks in terms of building a budget, that process. Can you just walk us briefly through that process before we get into some of the more seasonal aspects of it?
David DeWitt:
Yeah, sure. For sure. So there is one way of budgeting that I like above and beyond any other technique or strategy that’s out there and it’s simply called reverse budgeting, which is all that means is that when money comes into you, you have predefined goals and you put money towards those goals first. And then the money that’s left over is used for life. And you know that since you’ve already put… So let’s say you have $10,000 of credit card debt. You’re saying every paycheck I get I’m going to automatically put $200 extra to the debt and then the rest of it is here for me to spend.
And then beyond that, what I like to do is have at least… Well my system has at least three accounts. So there’s an account that’s dedicated just for money to flow into, that’s for the goal. It could be for investing or for paying off debt or for building an emergency fund, whatever it is. That’s what that account’s for. There’s another account that’s always funding your fixed expenses and commitments. So anything that’s fixed at all, you add up your monthly fixed expenses and that amount of money gets automatically put into that account and the rest of it goes into a spending account, which is your account for spending money.
And nothing is linked to that account, it’s just you handing the card to people to spend. So your job is to keep that account above zero. And if you can keep that account above zero you know very tangibly because that’s the only account you should really be checking because everything else is taken care of. You know very tangibly that you’re on track. And so when I have had clients that have been successfully getting there, and it’s always the transition mode when they’ve been on the credit cards forever, and it’s very hard to fully get to that point.
But once they do, what they tell me is, “Wow, I’ve never felt such control. I feel like I finally have it together. I feel like I’m actually on track making progress.” It’s always a reminder when they see their checking account that’s for spending, it’s above zero. They’re like, “I’m good.”
Nikki Kinzer:
So I just want to-
David DeWitt:
It’s hard to execute.
Nikki Kinzer:
… have you repeat. So there’s three accounts, right?
David DeWitt:
Yeah.
Nikki Kinzer:
So the first one I missed. What was the first one?
David DeWitt:
A goal account.
Nikki Kinzer:
A goal account. Okay.
David DeWitt:
So for instance if you have the credit card debt, you would open an account, just a checking account and money would get in there. Ideally you’d put money in there automatically. So if you have a direct deposit from work, you can split your direct deposit to go to various places. So you’d put the money in there and then your bank should allow you to nickname it, so that helps make it more real. So you could say I have one client, my favorite one is she calls it the FU debt fund.
Nikki Kinzer:
Love that.
David DeWitt:
So the money goes in there and then she just has an automatic pool from that account to the whatever credit card she’s currently tackling. And then the next account is for fixed expenses. And this is anything fixed at all. So this is-
Nikki Kinzer:
Rent.
David DeWitt:
This is your mortgage.
Nikki Kinzer:
Mortgage.
David DeWitt:
Your mortgage, but it’s also things as small as Spotify and that stuff. So anything that’s recurring. It’s painful for some people what you want to get off using the credit cards to pay for those things because you want to start paying for things with money you actually have.
Nikki Kinzer:
Right.
David DeWitt:
So you move all of those kinds of fixed recurring expenses to that and then you can quantify how much that is every month. And then that way you can say, “Okay, it’s $3,000.” And if you get paid twice a month, you would have 1,500 bucks from each paycheck get automatically dumped in there. So you’re always funded for your fixed expenses. And the rest-
Nikki Kinzer:
Where does groceries and gas… Are those fixed expenses? Because they can vary in how… They happen every month, but they can vary on how much they are.
David DeWitt:
For the purposes of this, they would be not in this, they would go into the spending account. So anytime that you’re typing in a credit card number for a new thing or you’re handing your card over to the grocery store person, because that’s spending that’s directly in your control.
Nikki Kinzer:
Got it.
David DeWitt:
There’s no prior commitment to grocery shop at Whole Foods. You could go grocery shop at the discount. So then it’s kind of a game then because how do I keep this account above zero. ‘Cause if you keep it above zero, you know without a shadow of a doubt, you’re spending within your means because it’s simply using money that you have. If you absolutely cannot do it, you have to find where’s your problem area.
Nikki Kinzer:
So that makes sense because you’re saying in the spending account going out to dinner and then you have control if you’re going to a fast food restaurant or you’re going to the nicest Italian restaurant in town. I mean it’s going to be a difference in cost. And then the groceries you have control over too if you’re going to be eating in or eating out. I see what you’re saying. So I’m processing this out loud for our listeners, but I get what you’re saying.
Pete Wright:
It reminds me of my parents. When I was very, very young, they were big envelope budgeters, right? They were cash only and that’s where they knew that utilities, there was an envelope that said utilities and they put cash for utility payment in that envelope. So they knew that if all the envelopes were full, they were set and whatever was left over they could abortion to goals or whatever else came, a living expenses like dining out, that kind of stuff. It sounds similar. This is a little bit of a throwback.
David DeWitt:
It is very similar to that for sure, for sure. There’s just not as many envelopes because you could honestly… You could open as many checking counts as you want and break it down as much as you want. But that gets overwhelming and it gets stressful and it gets harder to maintain. And the whole point of all this is make it easy to maintain automatic and then just be… Because I feel like ADHD’ers a lot of times we’re good at adapting on our feet.
You’re five days away from your next paycheck and you’ve already brought your spending account down to zero. Okay. You’ll intuitively know where you went wrong. You’ll intuitively know, we went out to dinner a lot this month. Let’s just not do that next month and try that. So you’re just adapting and going with the flow. You’re not going to get there every month. Sometimes you’ll have to use a credit card, but it’s just the way where the plan is always working and flowing and then you just have one job to keep that above zero.
And if you can’t, maybe you’re not… One thing that I have to tell a lot of people, which is my least favorite thing to do, but you’re not making enough money and that’s the hardest thing to have to tell people when they come to me. I’m like, “You’re actually doing a great job. You’re very frugal.” But on that income for two people and a kid, it’s hard. We need to find a way to help you earn more.”
Nikki Kinzer:
Bring more income. So I was going to ask you, and you sort brought this up a little bit, when is it a good time to use a credit card or do you say don’t use… What’s your philosophy on that with credit cards in general?
David DeWitt:
People always bring up, it’s more secure because you can… And that’s true. So there are times when you want to use a credit card. Sometimes when traveling, hotels, they don’t want you to use debit cards. If there’s risk where you think there might need to be a dispute, I would use a credit card. Sometimes you’re doing a big, big purchase just you might want to use a credit card because it’s big. But for things going to the grocery store and stuff and things that you’ve never had to dispute like your grocery store, things you never have to dispute and things like that, everyday stuff, I like to use the debit card because the studies show that people use credit cards spend 80% more.
Nikki Kinzer:
Yeah. I can see that.
David DeWitt:
That 80% more over five years is going to be way more than the few disputes or the few times you had to lose money because of whatever happened.
Pete Wright:
I think it’s interesting for a number of reasons. This is why, first of all, I regret moving to the card kind of society that we’re in. I’m a massive, massive digital payment person. I pay with my phone everywhere. It’s always my first thing. And yet I recognize that it makes my work of internalizing my spending harder because I don’t have the green stuff in my hands. I knew I was out of money when I was out of money. When I had my wallet full of cash, when I was out, I was out. I couldn’t spend anymore. And now even with a debit card, I could overspend a debit card if I wanted to. Just the way transactions work and timing and things like that, I could limit and backup accounts. I could if I wanted to get myself in trouble.
I miss as an old guy having actual cash. The other piece is I think having that safety and security piece. I also had my identity stolen and had my credit cards taken advantage of. I can tell you both having my credit card account stolen and having my debit card account stolen, I would very much prefer having the credit card account stolen because it is an absolute breeze resolving disputes there. And it’s very, very difficult with a debit card.
If somebody actually is able to spend on my debit card, it’s so hard to recover that from that purchase. But a credit card is lightning fast. I’ve had the banks tell me, please don’t use your debit card for online purchases. If you’re purchasing something from any online retailer, please just use a credit card and pay it off every month because it’s just too hard on you as a consumer to go through having those accounts stolen. We’ve gone through that process of removing all of our debit cards from any online payment profile just because we’ve been through that particular ringer.
David DeWitt:
And that’s a good point. So it is a double-edged sword for sure. I would lean towards if it’s a very trusted online vendor and I still would lean towards using the debit card, but I do see what you’re saying. It’s a good point. The way to use the same system with a credit card is to every month, if you have a card that has a zero balance, then you know that at the end of the month you want that balance to be less than what’s in your spending account. So you can use all of that spending account to pay it to zero.
So you have to just trick your mind to say, “This is actually cash I’m spending because it’s just the opposite. You’re watching it build to that number. Once you hit the number in the spending account, that’s your news like zero. And so if you can’t pay it all off of the spending account, you’ve just built debt for that month. You’ve just gone into more debt.
Nikki Kinzer:
I think that’s key is you really have to change the mindset of this is not a credit card, it’s a debit card that you’re paying off at the end of the month because then that’s how people get into credit card debt. It’s so easy to do.
David DeWitt:
Yeah, for sure. It doesn’t have to be permanent. Sometimes just going three or four months not using a credit card alone gives your brain time to heal from all the spending.
Nikki Kinzer:
Habitual spending.
David DeWitt:
Manic spending and all those patterns. If you just stop for three months, you’ll look back and you might realize, you might be like, “Why aren’t I having that urge right now to go on Amazon?” That’s eerie. But it’s good. You just have to give yourself a break from it. It’s like this circus. It’s this cycle that just keeps going and going and going. So you really just got to get off the Ferris wheel so to speak.
Pete Wright:
Well, and doing that functionally gives you a raise, right? That’s the thing that I have to keep telling myself is if I stop spending habitually too easily, I’m essentially giving myself a raise. I keep more money with the bank. That’s kind of mind-blowing. So if you’re struggling with getting the essentials, transportation, housing, clothes, food, maybe for me, I just have to stop buying demand strips and I can give myself a healthy raise every month.
David DeWitt:
Yeah. It’s so true. And money that stays in the bank buys things like freedom, security, peace of mind.
Nikki Kinzer:
Oh, for sure.
David DeWitt:
And that’s hard to put a value on.
Pete Wright:
What’s your stance on credit cards, like functional use of credit cards with rewards, rewards cards? I know that there’s such a massive culture of points, airline points, et cetera. All those points. I have read in the past that those are of some dubious sort of function in the overall economy that they may be bad for the economy, certainly bad for prices and that you may not be doing anybody any favors by getting a points card. Do you have a position on those cards?
David DeWitt:
Not how it’s hurting the economy. I haven’t heard that. So that’s interesting. But you have to be responsible with your credit cards first, period. No matter what. Your points mean nothing if you’re carrying a $10,000 balance. They don’t give you back near anything close to what you’re paying in interest. So you either can responsibly use credit cards or you cannot. If you can, get points. However you want to get points. You want to make sure if you like to travel, use the travel one.
If you like to have extra cash so you can buy yourself something on Amazon that’s costing you nothing because you’re using points, get the Amazon card. But I’m not really huge into like that because as you can imagine, so much of what I do is helping people stop [inaudible 00:30:11] Day to day, I’m not helping people find the perfect credit card, I’m saying let’s just cut your credit card off and throw it away for a few.
Nikki Kinzer:
Yeah, because I think it’s a little deceiving because it is the interest rate and all of what you’re paying… It just doesn’t really… Do you really win at the end? I don’t know.
David DeWitt:
If you really want to get angry, add up all the money you’re paying to the banks. If you have $20,000 credit card debt and it’s 25% interest, it’s a lot of money that you’re paying to the bank, to bankers, to the bank.
Nikki Kinzer:
They could have bought you three things that you’d be getting on Amazon with the points.
David DeWitt:
It’s a lot of money and that should frustrate you and that can be motivating just to see that because it’s like, “Oh, wow.”
Pete Wright:
I found the article I’ll post it in the show notes. The ugly truth behind your fancy rewards credit cards. America’s poor foot much of the bill for credit card points miles and cash back. It’s worth reading. I think if you are a points person, it’s worth just acknowledging the role.
David DeWitt:
The poorer people can’t have the card that has the points so they have a higher interest rate maybe or an average something like that.
Pete Wright:
Yeah, right.
David DeWitt:
[inaudible 00:31:37] That would make sense.
Pete Wright:
So let’s transition now to ADHD impulsivity and the holidays. How do you put the breaks on the way you’re thinking about gift giving for people to holidays? How are you guiding your clients right now?
David DeWitt:
My clients are different animals just because they have a structure with me that they have their roles in place. They’re structured. There are guidelines in their… So they’re very cognizant. So it’s hard to answer this question in a way that’s like, it’s November 30th. What are you going to do? Right?
Nikki Kinzer:
Yeah.
David DeWitt:
The real answer is to do the work, to develop a system so that for next year, for instance, you’re good to go. Maybe you’re putting 10, 20 bucks per paycheck into a slush fund account that’s for Christmas, something like that. So you’re building up cash for Christmas so that you’re not like, “Oh, I’m going put a thousand dollars on my credit card and now I’m going to carry that balance for much longer than I’m telling myself because I’m rationalizing that. I’ll pay it off next month, but I won’t.” And then just the thing happens.
Frankly, if that’s you and that causes stress ultimately then the simple answer is just set a limit and just tell someone that you’re setting a limit. Tell someone you trust an accountability partner anybody and say, “I’m not going to spend over this.” It’s so hard though, right? Because maybe you’re in a family where everyone is always buying each other really nice expensive gifts and then you’re the one person that gets the cheaper gift.
So you can just tell your family like, “I’m working on myself. I’m working on my money, so this is why you’re getting this.” But look forward in five years. You’re starting to get amazing gifts when I have everything set up.” So you have to just set a limit and look through and do a cash flow exercise. Look at your spending for the last three months and see how much money you actually have leftover. And then just set a limit and spread it out. Be thoughtful with your spending, be intentional, look for deals, go to the outlets, go to the discount places, fine and be more creative with your gift giving. Make something. Hard to give good advice on that, I feel like.
Pete Wright:
Well, especially now. We’re talking about this. We’re recording this the last day of November. It’s hard to say to those listening, we recognize how hard it is to say, “Okay. Now spread it out over the course of the year because we are living with ADHD and we know that impulse buying is a problem.” Most of us haven’t started shopping anyway. We’re going to reap the worst parts of everything. We have it saved, but we’re also taking advantage of no sales.
Nikki Kinzer:
Right.
David DeWitt:
Yeah.
Pete Wright:
Because we’re shopping the night before. So I really recognize how hard it is. Just [inaudible 00:34:43].
Nikki Kinzer:
Yeah. I think that the lesson too is how do you prepare for next year? So saving a little bit. I remember when I worked at a credit union, they had a special Christmas fund account that you could put money in every month. And then at Christmas time, this is what your budget was. It was already there. But something I want to just tack on to what David was saying. Last night we had a coaching group and this subject came up about gift giving and ideas and stuff like that.
I think it is about being creative and not having to spend a lot of money with being creative. And some of the things that came up in the coaching call were great. Somebody was talking about doing a theme basket. Somebody that if you know that they like tea, you could do a coffee cup with some tea and make something that’s not very expensive, but very thoughtful.
One of the gifts that I got from somebody was a picture of us together and they framed it and gave me as a gift. The frame probably did not cost that much money, but the thought of having this framed picture of this person and I was really thoughtful. So I think it’s doing things that don’t have to cost a lot of money because if you’re in that family that is expecting you to spend a lot of money and you don’t have that money, that’s an icky family. You have more problems than just gift buying.
Pete Wright:
Step one, dissociate from your family. Okay? Now let’s talk about a budget.
Nikki Kinzer:
Right. But I think it is more like what you were saying, Pete, at the very beginning is where are your expectations? You’re probably putting them too high on yourself.
Pete Wright:
I was just thinking about that, Nikki. You talk about just framing a simple picture. It is an effort of love. But where my brain goes is I wonder if I could take this picture that I snapped and took me 30 seconds on my iPhone and send it to some artist on Etsy and have them create a 16 by 20 oil painting of this picture and bing, bang, boom-
Nikki Kinzer:
Yeah, you don’t have to do that.
Pete Wright:
… $2,000 later I’ve got a classic fresco. My god, I skim so quickly out of the excessive-
Nikki Kinzer:
You can go to HomeGoods, get a frame for 9.99, you’re good. Yeah. But I think it’s being creative.
David DeWitt:
But to be fair, that is not as exciting. That’s not as stimulating. That’s not as… Spending a lot of money really does do something to our brains in the short term. It feels really exciting in the anticipation.
Nikki Kinzer:
Pause, pause, pause, pause. Because I think it is one of those things that when we’ve talked about impulse buying and in the past, not just around Christmas, but having that pause button, if you see something, give yourself 24 hours before you buy it. Walk away from the store. Put it in the cart, but then walk away and give yourself some time to process it on whether or not it really is something you need and want, and aren’t going to feel guilty about because that dopamine hit is not worth the feelings of buyer’s regret.
Pete Wright:
Yeah, regret.
David DeWitt:
Yeah, for sure. It’s some of things you can do like put a sticker on your cards that says, “Do you really need this? Is this just a one? Or what deep sadness that you’re feeling today? Are you resolving by buying this thing?” Something like that. That works for whatever you want and then have something. But yeah, pausing, asking yourselves, “What is this going to be doing for me in two years from now? Is this providing any value to me beyond this temporary relief or whatever?”
Nikki Kinzer:
So I have a more general question for you because I have a lot of people that I work with individually who will say one of my goals, one of the things I want to work on are my finances. I need to get them in control. They’re a mess. I don’t exactly know what a mess means because it’s different for everybody. I’m not the financial person so I’m not the one that can really help them with that. We can set some goals but they’re going to have to do the research and figure it out. I don’t know how to set somebody’s budget up.
That’s what you do. So I can refer them to you. But what do you say to people that, “Yeah, my finances are a mess. Don’t know where to start. I can’t stick to a budget.” How do you even start with someone when you feel that out of control in your financial life?
David DeWitt:
Well, that’s pretty much everybody who comes to me. So I’ve got some experience.
Nikki Kinzer:
That’s right.
David DeWitt:
The out of control 9.9 out of 10 times comes down to cashflow spending more than you make. No one who spends half of their income and saves the rest will tell you that they feel out of control with their money. So that’s always it. So it’s just a deep dive into you, what you actually want. So what often happens is people with ADHD, because I always find them to be very nice and good people. Generally speaking, very generous.
They have deep held important values that they want to be living up to but they aren’t. So it’s their actions are so divorced from their actual desires that it creates this chaos and also the guilt and the shame and the feeling bad. So identifying deeply what your values are and then ranking one to 10, are you living up, how do you feel you’re doing with this value?
It’s like, “Okay, three.” So maybe the value is supporting my family and protecting my family. If I’m doing a three because I have never gotten insurance or one bad thing away from disaster, okay, what would it look like if you were a 10? What would it look like? And then from there it’s like, “Okay, I guess I would have emergency fund. I guess I would have this and that.”
So then you start framing goals, but it’s all tied to a value that’s important to you and that helps make it more motivating and feel more real and purposeful. So that’s kind of where you start. But once you figure out those goals and your values and you feel grounded and ready, then we dive into cash flow. We look at expenses. We categorize. We do an expense worksheet. We see exactly how much you’ve been spending, exactly how much is left over or not left over. And we say, “Where are we going to cut? Where are we going to cut? You’re going to cut this, that. We’re going to do this and that.”
Nikki Kinzer:
Where can you add income? Right? I’m sure that that comes up as part of the conversation too.
David DeWitt:
That’s big. Always like how can you get the next promotion? Is there something you can do on the side? It seems like you’re overqualified for this job. So that’s important too for sure. And then we set up the structure. I’m basically walking them through, setting up all the accounts and stuff and then they’re on their way. Then they check in with me for accountability, see how it’s going. They’re like, “No, where do we need to improve?” So that’s basically it. But it’s cash flow. It’s breaking habits. It’s breaking habits.
Nikki Kinzer:
I think that’s really good to just hear so that people can see there is a starting point because you’re looking at everything and you’re going off of emotions. I find that really helpful. Thank you, David.
Pete Wright:
Well, and I think focusing on habits. It’s like any other habit. You can treat it like one of the mini habits that we’ve been talking about, like did you log your grocery receipts when you got home? What is it that’s going to help you reprogram yourself to think of money, not as this separate giant thing that you have to take on but as an equal opportunity for change just everywhere else.
David DeWitt:
Yeah, exactly. So that’s such a good point. And what’s really helpful is you get everything organized and everything and we say, “Okay. We’re going to cut back on these things and we’re going to put this much money towards your credit card debt.” And then it’s like that’s our first goal. We’re just focusing on this one thing and if you do this repeatedly, I’ll use my software and say, “In one and a half years you’ll be out of it.”
So that gives them an end and that gives them like, “Okay…” And then once that’s done, it’s like what’s the next step? Now, that you’re out of that, let’s build a real emergency fund. Before we’ve already built the one month emergency fund just to make sure we can get through this debt payoff cycle, but then let’s build a three six month emergency fund that’s only going to take a year and a half or whatever it is. So those roadmap of what’s next, what’s next, what’s next? It’s not do all this at once.
It’s constantly this journey up the hill making progress. Of course, I might be like, “You need to get a state planning.” But that’ll be like a side thing. You need insurance. That’ll be like that. But the focus is always on what are they doing that’s building wealth? Because ultimately I’m a wealth builder. That’s what I do. I just tell people, build wealth, keep more of their money, wealth for whatever they want. Do you want to leave a legacy or do you want to die with no money? Whatever. It’s up to you. But let’s figure out the plan to do that.
Nikki Kinzer:
That’s great.
Pete Wright:
I feel like for me it was being able to reprogram my ADHD to get the dopamine hit from the management process of the budget like being able… And my budget is fine grained, right? Because I track every individual subscription. I track everything.
David DeWitt:
You’re a rare breed
Pete Wright:
It has a line at it.
Nikki Kinzer:
You are.
Pete Wright:
But that’s because that’s my hyper focus. I get lost for a day in our budget. And because I do that, I happen to live with a partner who is really good at maintenance. So once I go in and spend 12 straight hours in fine tuning the budget where everything is, she’ll go in and she’ll make sure that the receipts are being entered as they go and they just track perfectly. And that stuff, that has made a really important difference in our lives. Being able to say my ADHD can work for me and I can get just as much of that electric thrill at looking at where we’re saving money as where we’re spending it has allowed us over the last five, six years to actually save it. It’s huge.
David DeWitt:
I’m glad you said that because that’s something that I try and tell all my clients is we’re going to change the dopamine reaction from the spending to the saving. You’re going to become just as addicted you were to spending as you are to watching your net worth increase because that’s satisfying. So it takes a while. A lot of times there are also lots of other work on the back end with how did you grow up with money? What did you see?
Lots of times people that grew up with a little bit of money, once they finally get money, they think they’re just supposed to spend it but you’re not. So you have to teach them how to… So I use some psychological assessments to score people and got predictive power, blah, blah, blah.
But it’s like these are the six characteristics that wealthy people all share. And this is your scores on those characteristics. Where can we improve? Where can we help you with your mindset with embracing frugality? I have nothing. I love nothing more than seeing a really nice Tesla in the Aldi shopping center because that person is buying the Tesla because he really does value having a nice car, but he also likes to get a great deal on groceries.
Nikki Kinzer:
It’s interesting. I’m glad you bring up the psychological part of it because especially with relationships, because if you look at what breaks relationships, it’s a lot of finances. A lot of times it’s around financial stuff.
David DeWitt:
Yeah, sure.
Nikki Kinzer:
It’s an important conversation to have when you are in a relationship where you’re going to be sharing expenses and paying into a mortgage or whatever. I remember when I first met my husband, he had a bonus from his company and I was like, “Wow, that’s so awesome that you got this bonus. What are you going to do with it? What are you going to buy for yourself? ‘Cause you work so hard.” He looked at me and he’s like, “Well, I’m just going to invest it. I’m not buying anything.”
David DeWitt:
That’s awesome.
Nikki Kinzer:
And I’m like, “What?” But I got to tell you, we’re in a very good positive situation, financial situation because of him, not because of me, but I adopted his philosophies of saving and not spending just because you have it. I’m sharing this in the sense that if you are a spender. You can change the shift of how you think. And when you’re in a partnership, it’s really important that you compromise. No, I’m not saying that he doesn’t… We still buy things and we still get things that we want, but that background is really important to understand where he came from on feeling that way because his parents are the same way and where I did not have that model necessarily.
Pete Wright:
Well, you know what? That’s interesting, Nikki, that really that case example defines for us, and I think it’s important for people to hear it, especially if you’re in our community and you are living with ADHD and you have money problems. Those are two separate scales. Two separate spectrum disorders. There are many people out there who have an unhealthy mindset about money who don’t live with ADHD. Your ADHD is not causing your money struggle.
Nikki Kinzer:
No, not at all. I mean, it may even with the impulsivity, but I think you’re right on. I mean, this is an issue for humans, right? I mean, this is a human issue.
Pete Wright:
Yes, human issue. It’s an issue for… Yeah. I think that’s really important because you can separate those two things and you can use your ADHD as a tool to help mitigate some of those things. I mean, it’s a hard high mountain to climb and you need support, but it’s possible to do it and to live healthily with ADHD and money at the same time.
David DeWitt:
Definitely. Not just an ADHD thing. It’s pervasive and our society has not helped with the consumerism and all that. But where we are.
Pete Wright:
Speaking of consumerism, one last question and I feel like this is a warning there be monsters here kind of question as we wrap up. Because it’s the holiday season, many, many places are offering these new buy now, pay later or pay over installments. It feels like an old layaway program. And the holidays are a great time for retailers to be offering these kinds of programs. Can you just give a sense of what you think of these programs and why ADHD impulsivity should maybe to take a step back?
David DeWitt:
It’s debt. So you just have to remember that you’re buying now and you’re going to spread it over whatever, but you’re taking on a liability. You’re still paying the same amount. It’s going to hurt your cash flow in future months because you’re paying this every month now. You can’t buy more things because you’re doing that.
Pete Wright:
It’s not giving you permission to buy more than you can afford.
David DeWitt:
You can’t increase your spending limit for Christmas because you’re actually only spending $40 because you’re going to spend 40 bucks for the next six months. You have to treat it the whole thing because you are paying that whole thing. Man, I’ve had so many people that they just have dozens of these things and it’s like they build up and they add up and they’re dangerous. I’m not a big fan. It’s only good for the person that is really good with their money. It really is because they understand the time value of money and they understand that having more of their money in their pocket now is worth more than giving it all away now because they could invest the difference, for instance. And there’s ways to do the arbitrage, blah, blah, blah. But not for the people that are living in this chaotic world.
Pete Wright:
It’s the only thing you’re doing by keeping that money in your pocket is spending it on something else. That’s a problem.
David DeWitt:
Exactly right.
Nikki Kinzer:
Recently I watched reruns of The Middle. I love that show. And they had a whole segment on this TV that they bought and it was like, “Yeah, you buy this now and you pay later.” And they forgot. And so now they have this bill of so much money that they have to pay for this TV that they forgot that they were going to pay later. I think that that’s a real issue. I can totally see that happening in somebody’s ADHD mind. I’m going to do it later. I’ll remember it. I’ll get to it, and then all of a sudden, two years or a year comes by, you don’t remember it. And bam, you’ve got this big huge bill that you weren’t even expecting to have.
David DeWitt:
And then next thing you know have 10 collections accounts and they’re calling.
Pete Wright:
Those are accounts you don’t want to have a lot of. It’s really an important lesson. I just think it’s important to say the words like it’s debt because there are so many companies that are vying for this market as if it’s a new thing. It’s not a new thing. It’s a shell game.
David DeWitt:
It’s debt.
Pete Wright:
It’s debt. It is just debt.
David DeWitt:
There’s one thing I did want to say from a personal level. So part of why this all was important to me is because before I did this and while I was actually being a financial advisor, I’m saying that separate from financial planner because I was more just on the investment side, I was struggling with my money a lot. I would impulsively spend and I was building up credit card debt, and I developed lots of shame and guilt about it.
So I had to work my way through that to lead me to the point where I am now, which is still not perfect, but a lot better. And what I did and which I try and get all my clients to do, but it’s the hardest thing to do, but it’s in my opinion because I think it completely got me off the impulsive spending cycle is to hand write track spending every single day.
It is amazing what it does to your brain. What I did was I had a piece of paper on my counter and I didn’t… I wasn’t perfect. So I would just come home from work and I would just think about what I bought that day and I just jot it down. And then a week goes by and the paper is filled to the end, and it’s like, wow. And then you start doing the mental math, 300 bucks at the convenience store this week. That’s ridiculous. And then you just start… You do that, writing it down. It’s a lot different than typing it. It’s just something with your brain. It was just the best exercise I’ve ever done for myself. And so I recommend that.
Nikki Kinzer:
Yeah, good.
Pete Wright:
I think that’s huge. I mean you look at what’s going on right now with inflation. Everything is expensive at the grocery store. Everything is expensive. Handwriting it, allows you, I think to be much more sort of agile in your spending and roll with taking money from one category to put it in groceries if you need to, but know that you’re going to have a shortcoming, but you have the list every day. You’re internalizing it. I think that’s really powerful.
Nikki Kinzer:
Well, and something with that too is I was at the grocery store, this was a few weeks ago, but I had grapes and she looked at him and she’s like, “Okay…” This is from the clerk. She’s like, “Okay. So these are…” So it was like 16.99 for these grapes. And she kind of looks at me like, “Are these the right ones?” And I’m like, “Yeah, no, because half of those grapes are going to go bad because we’re not eating them.” I’m like, “Yeah, no, no, no. I don’t want the grapes. But it’s so important to pay attention to that.” I wouldn’t have noticed until she said something. And there were some specialty grape, but anyway…
Pete Wright:
Probably tasted like watermelon.
David DeWitt:
Yeah. So when you do it on the piece of paper on your counter, you always see it when you walk by. And so you are visually seeing every day how the little things are adding up.
Nikki Kinzer:
Yeah, for sure.
David DeWitt:
And that’s kind of what… Because with apps and stuff, you have to remember to log into the app and it just doesn’t hit the same. When you have it on the piece of paper, it’s very in your face. And you have to keep it external so you see it on your fridge, wherever. Put it somewhere you’re always going to see it and remember to do it.
Nikki Kinzer:
That’s a great idea. I love that. Thank you so much. This was so helpful. I love it.
Pete Wright:
Yeah, huge. David, this was great. We need to get to the plug part. Obviously, tell us where to find you and tell us just briefly about your podcast.
David DeWitt:
So I have a podcast called ADHD Money Talk. You can find it at adhdmoneytalk.com. I’ve been doing it for almost a year now. Most of them are just solo episodes, me talking about a topic and whatever. It’s been fun. It is getting harder to fit them in and figuring out how to get them done, but I plan to keep going and making it. So a lot of people have found me and become my clients from listening to that just because they-
Nikki Kinzer:
They need your help.
David DeWitt:
… they like it. Yeah, exactly. And if you want to explore my services, you can go to dewittcm.com/adhd. That’s like the homepage for the ADHD half of the business because it’s… Long story. So anyways, that’s basically it.
Nikki Kinzer:
Great.
David DeWitt:
Yeah, this was really nice. I really enjoyed being on here. Thank you so much.
Nikki Kinzer:
Thank you.
Pete Wright:
Well, we sure appreciate it, David. Thank you so much for hanging out with us. And thank you everyone for downloading and listening to the show. Thank you for your time and your attention. Don’t forget if you have something to contribute to the conversation, we’re heading over to the show talk channel in our Discord server, and you can join us right there by becoming a supporting member at the deluxe level or better. On behalf of David DeWitt, Nikki Kinzer, I’m Pete Wright, and we’ll see you right back here next week on Taking Control: The ADHD Podcast.
