How the brain busts the budget

So does a problem with your brain chemistry let you off the hook for creating financial chaos in your life? Hardly. But if your head is wired differently, it may help explain why your previous efforts to get your financial life under control haven't worked. Proper diagnosis and treatment, plus approaches to money management that take your condition into account, could help you get your finances on track.

That's been the case for Autrey, whose road to financial health started with the household management site FlyLady.net. Autrey began setting small goals and achieving them, including spending 15 minutes a day working on a budget. After that was in place, she signed up for online bill payment at her bank and set up automatic, recurring payments for most of her bills.

"I finally admitted to myself that I couldn't depend on myself to pay the bills on time if I had to juggle them all every month," Autrey said. "My biggest triumph was in recognizing my weaknesses and realizing that I didn't have to conquer them, I just had to deal with them."

Likewise, after a lifetime of being disorganized and forgetful, Pati has noticed a difference in her life since she began taking Adderall, a drug commonly prescribed to people with attention problems.

"I . . . feel more in control of my finances and work in general," she said.

Here are some thoughts for those who think their money problems may lie in their brains:

Get educated -- and diagnosed. Forgetting to pay bills doesn't necessarily mean you have ADHD, any more than mood swings make you bipolar or depressed. You can educate yourself about these conditions at various Web sites, including the Depression and Bipolar Support Alliance and the Attention Deficit Disorder Association. But to get a proper diagnosis, you need to be evaluated by a mental health professional. Therapy and medication might be indicated.

Create a "pause" button. If impulse spending is an issue, professional organizer Debbie Stanley suggests creating mental "pause" buttons that help you to think before you act. To short-circuit the "I need it, I want it, if I don't get it now I'll forget" impulse, Stanley recommends carrying around a list of stuff you want to buy and adding items to the list, to be reviewed later.

Artemio, who has ADHD, won't buy anything at a store unless it's already on his list. He also forces himself to wait at least three days before buying "stuff I can't eat." Finally, he calls his bank or checks his balance online before making most purchases.

"I don't keep a (check) register," said Artemio, who asked that his last name not be used. "It's near impossible."

Some will need to go further, such as cutting up credit cards, freezing them in blocks of ice or shutting down credit lines entirely. Palaian often suggests her clients try going a month without carrying credit cards, using cash instead. Those with bipolar disorder may need to reduce their cards to one low-limit account, Stanley said.

Get help. Nobody's good at everything, and one money-management solution is to simply hand it off to someone else.

"It's OK to admit, 'I suck at this,' " said Linda Anderson, president of the Attention Deficit Disorder Association and an ADHD coach. "Ask, 'who could I put on my team to help with this?' "

Having a spouse or partner take over bill paying and other money-management duties is one solution, Palaian said, as long as the couple avoids "setting up a parent-child dynamic" with the bill payer in a controlling or punitive role.

• Video: Diet linked to mental health

For those who can afford to do so, hiring a bookkeeper or daily money manager is an option. Stanley, author of "Organize Your Personal Finances in No Time," recommends the American Association of Daily Money Managers as a source for referrals.

If you can't afford one-on-one help, Anderson said, a low-cost alternative can be Debtors Anonymous, a self-help group based on the principles of Alcoholics Anonymous. Group members support each other in their efforts to erase and avoid debt.

Automate. Most people can benefit from putting their finances on autopilot, but automation is especially helpful for those with attention or distraction issues. The fewer money decisions that have to be made each day, the better. Among the ways to automate:

• Sign up for direct deposit of your paycheck or any other regular income.

• Use automatic debits or recurring online payments for bills.

• Set up automatic transfers from a checking account to a high-interest-rate savings account.

• Automate investing by signing up for workplace retirement plans, such as 401(k)s, or set up regular transfers to an IRA.

• Further automate your investing by using life-cycle or target-maturity-retirement funds that handle asset allocation and rebalancing for you.

Columns by Liz Pulliam Weston, the Web's most-read personal finance writer, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Published Aug. 2, 2007

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