Money Management For Occupational Therapy (2024)

“You must gain control over your money, or the lack of it will forever control you.”

Dave Ramsey

Want to know the best strategy to teach your O.T. clients about money management? This money management technique is a simple way to teach individuals with Autism, A.D.H.D., and anxiety how to budget and manage their money.

You will learn the importance of setting financial goals, how emotions drive spending behavior, evaluating past financial decisions, and creating a simple budget to get started. As a female with A.D.H.D., I have found this method efficient with my spending and budgeting.

After learning these money management strategies, you will feel confident to help your clients and feel inspired to create your budget to give you financial freedom.

This post is all about money management in Occupational Therapy.

Budgeting and money management can be daunting, so I’d recommended completing these steps over several O.T. sessions.

1. Reflection Questionsfor Money Management

There are no right or wrong answers to these reflection questions, but it’s a great way to gain insight into behavior and self-awareness.

I’d encourage them to imagine the best-case scenario and respond with their deepest desires to plan for the life they dreamed of.

• Are you more of a saver or a spender?
• How much debt do you have?
• How much do you need in savings to feel comfortable and secure?
• Was money openly discussed in your household growing up?
• When you reflect on your life in your older age, what will be your most significant accomplishments and defining moments?

• Do you prefer to eat out or cook at home?
• Are you okay with thrifted clothes, or do you prefer brand-new ones?
• What type of insurance do you need?
• What mode of transportation will you use to get from one place to another?
• How many vacations per year do you plan on taking?
• How much do your hobbies cost?

• Do you plan on owning a townhome, condo, cabin, tiny home, mobile home, or home one day?
• What do you want your wedding to look like if you get married?
• How many children would you like to raise?
• Will someone stay home with them, or will they attend daycare?
• Are you going to help them pay for college or trade school?
• A what age would you ideally like to retire?

2. Identify Emotions Associated With Money Management

Emotions drive behavior, which is why it’s essential to understand the emotions around money and how it impacts spending, saving, and budgeting behaviors.

Here are some emotions commonly felt with money for clients to self-reflect on. Reassure them that there are no right or wrong answers.

Green Zone

• Content
• Successful
• Inspired
• Confident

Blue Zone

• Depressed
• Inferior
• Guilty
• Ashamed

Yellow Zone

• Anxious
• Inadequate
• Vulnerable
• Overwhelmed

Red Zone

• Powerful
• Jealous
• Critical
• Neurotic

3. Understand the Difference Between Wants vs. Needs | Money Management

Needsare essential for survival and are necessities to live and work.

Physiological and safety needs are at the bottom of Maslow’s hierarchy of Needs. An individual must feel safe and cared for to build a solid foundation for intellectual and creativity.

Examples ofNeeds:

• Shelter
• Property
• Air
• Water
• Food
• Sleep
• Clothing
• Child care
• Transportation
• Employment

Wantsarenotessential for survival but make life more comfortable and enjoyable. Therefore, these can be consideredsplurgesandweaknesses.

Examples ofWants:

• Dining or take-out restaurants
• Going to the movies
• Fashionable clothes
• Gifts
• Car gadgets
• Latest upgraded cell phone
• T.V. subscriptions
• Gym memberships
• Seasonal home decor
• Manicures and pedicures
• Vacations
• Amazon orders

Individuals with A.D.H.D. struggle with impulse control, so it’s crucial to identify and create a plan.

If you or your client struggle with impulse control, DO NOT get a credit card.It’s a dangerous trap that involves little thought and instant gratification with hefty consequences once the bill arrives.

4. Write One SMART Money Management Goal

After answering the reflection questions honestly, it’s time to reflect and identify one financial goal to focus on.

Here is the formula for writing SMART goals:

S = Specific

The three common financial goals are:

• Paying off debt
• Saving money
• Improving credit scores

Choose one specific money goal that aligns with their desired result.

M = Measurable

Thankfully, financial goals are easy to measure. However, to make goals measurable, help your client find the exact monthly number and the total end goal.
For example, saving $1,000 a month would be the end, and $100 would be the monthly amount.

A = Attainable

Is this financial goal compatible with the individual’s strengths and weaknesses regarding money? Does it match past money behaviors?

R = Realistic

Does the goal align with core values and dreams? Does it match their current life situation? This goal should be a step forward to achieve the financial goal and dream life.

T = Time

When is the anticipated date this financial goal will be achieved? It could be days, weeks, months, or one year.

Examples of S.M.A.R.T. Money Management Goals

• Paying off a $15,000 car payment with a minimum monthly payment of $500 in 3 years.
• Paying off $40,000 in student loans with a minimum monthly payment of $450 in 7 years.
• Calling the credit card company to reduce interest from 22% to 11% by the end of the month.
• Saving $5,000 in an emergency fund by setting aside $300 for 16 months.
• Saving up for a $10,000 down payment on a home by saving $250 monthly in 4 years.

5. Evaluate 3 Months of Most Recent Bank Statements.

Materials for Money Management

• 1-3 months of most recent bank statements (printed)
• Paper & writing utensils
• Several colored highlighters
• Calculator

For this step, you will need a paper printout of the most recent bank statements and highlighters to color code and categorize.

You don’t have to use these exact colors, F.Y.I.

• Green = Income
• Blue = Rent or home
• Purple = Utilities (i.e., gas, water, sewer, electric, etc.)
• Pink = Insurance (i.e., home, life, car, etc.)
• Yellow = Food (i.e. groceries & restaurants)
• Orange = Transportation (i.e., vehicle maintenance, car insurance, bus, public transit, etc.)
• Red = Entertainment (i.e., hobbies, fun activities, vacations, etc.)

After color coding each section, add the totals and write them down on paper. You will need the amounts for the next step.

6. Distribute Money According to the 50/30/20 Rule.

After color-coding the bank statements, it’s time to apply the 50/30/20 rule.

I recommend googling each amount for accuracy. There is no shame in using your resources. For example, “What is 20% of $3,500?”

The monthly take-home income is the leftover paycheck after taxes and other payroll deductions (i.e., health insurance and retirement).

50% for Needs

To calculate 50% of the income, divide it in half. For example, 50% of a $3,500 monthly income is $1,750.

• Mortgage and rent
• Transportation
• Child care
• Utilities
• Groceries

30% for Wants

These next two sections are for the other 50% of the income. For example, 30% of $3,500 is $1,050.

• Entertainment
• Travel
• Shopping
• Subscriptions
• Restaurants

20% for Savings or Paying Off Debt

This is the last piece of the income pie. For example, 20% of $3,500 is $700.

• Emergency
• Retirement
• Savings
• Debt payments

The 50/30/20 method doesn’t have to be perfect and exact, but it’s a great starting point.

7. Create a Zero-Based Budget

The first step to creating a budget is to list every source of monthly take-home income, which is the leftover paycheck after taxes and other payroll deductions (i.e., health insurance and retirement).

Note:Some employers send paychecks on set dates every month for 24 paychecks per year, and some pay their employees every other week for 26 paychecks per year.

The second step is to write the monthly expenses (needs + wants) using the 50/30/20 rule.

The third step is to identify the due dates. Finally, you can enroll in auto-payments if the client struggles with memory and organization skills.

The fourth step is to subtract the income from the expenses.

The fifth step is to identify if there is moreincomethanexpensesor moreexpensesthanincome.

If there is moreincomethanexpenses, the leftover money can go towards the S.M.A.R.T. goal. If there are moreexpensesthanincome, trim the wants list until it balances out to zero.

8. End-of-Month Money Management Reflection

At the end of the month, you can help the client reflect on how the budget they created worked or did not work for them.

• Was some progress made toward the one financial goal?
• Does the budget need to be adjusted?
• Did anything unexpected happen this month?

This post is all about money management in Occupational Therapy.

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