How Autistic Individuals can Develop Financial Independence - Part 1

One of the key goals of adulthood is to seek financial independence from our parents. It's all very well to be living off "the bank of mom and dad", but parents will not be there forever and financial independence is a major stepping stone to being able to do your own thing without the controlling influence of others. 

In this two-part series, I want to look at eight steps towards financial independence and the way in which our autistic traits can make this difficult. I want to suggest some ways that autistic individuals can mitigate some of these problems.

The chart below covers the eight steps.

Step 1 Developing the right mindset

There are three critical parts to developing a good "financial literacy" mindset. 

• Educate Yourself on personal finance terms; budgeting, saving, investing, debt and credit. 
• Avoid the biggest money pitfalls - Bad investments, bad debt and scams.
• Develop a healthy money mindset - Financial Independence is a journey not a destination. You don't simply reach it and stop; you will continue to strive for it throughout your entire life. 

Autistic individuals often struggle with abstract concepts and big picture thinking but it depends on the individual, their position on the spectrum and their general range of interests.

School-level commerce isn't really the best introduction to personal financial literacy. You need something closer to your day to day activities rather than information about global finance. 

Since many autistic people are visual learners, watching YouTube videos, especially with subtitles on, can really help in this regard. 

Videos about scams are particularly helpful for this kind of learning as they show how people can be easily tricked into making financial mistakes. Just be aware, that sometimes autistic people may find scam videos "too scary" and could develop a phobia as a result. 

Autistic people are often great with experiential learning, which is; learning by actually doing things. This could mean going into banks or it could mean playing computer or board games with a strong financial angle. "Monopoly" being the obvious example for young children.

Board Games for Financial Literacy:

Board games can be a fun and engaging way to learn about personal finance. Many games simulate real-life financial situations, helping players develop skills in budgeting, saving, investing, and managing debt. Here are a few examples that might be suitable for young adults:

• Monopoly: Teaches basic money management, cash flow, and negotiation skills through buying, selling, and developing properties.
  
  
• The Game of Life: Simulates real-life financial decisions related to education, career, investments, and family, emphasizing long-term financial planning.
  
  
• Payday: Focuses on managing monthly income and expenses, including budgeting, paying bills, and handling loans.

Here are some links to educational resources to get you started:

• Miacademy Learning Channel (YouTube)
• The Student Guide to Personal Finance (YouTube)
• MoneySmart Australia (Government Website with good information)
• Khan Academy Personal Finance Course (Education)
• Money Basics (GFC Global Education Courses)

Step 2 Budgeting and tracking expenses 

Figuring out Income and Expenditure

One of the first steps in any financial plan is to create a budget. This means that you either use an app or a spreadsheet to list all the money coming into your account - this is your income. Then create a second list of all the money going out - this is your expenditure. 

You'll need to standardize your time unit. For example, if you pick "Monthly" and you get paid fortnightly, then you should have two pay cycles in there. 

If your electricity bill comes in quarterly, then divide it by three to get your monthly cost. Don't forget to factor in annual costs too - and divide them by twelve.

It's a good idea to factor in "random" expenses, such as occasional parking or speeding fines, especially if there's a good chance that they will occur again, However, only consider income that you can truly rely upon. Don't include "extra income", like unexpected or performance-based bonuses. 

The aim, is to be able to get your total income for a given period, (e.g., a month), and subtract your total expenses for the same period. Ideally you will end up with a positive number. This number represents how much money you are saving each month. 

If the number is negative, then it means that you are "eating through your savings" and will soon get yourself into debt. In this case, you'll need to see if you can reduce your expenditure or increase your income. Reducing expenditure is usually much easier to do.

Reducing Expenditure

One of the easiest ways to reduce your expenditure is to categorize it. Group expenditure into Essentials, like electricity, food and rent, and Leisure/Entertainment like dining out or spending on your hobbies. You generally can't compromise on the essentials but you should be able to reduce leisure expenses. 

While it's certainly possible to reduce leisure expenses to zero, it's generally not recommended. Having a little spending money is good for your self-esteem, and it will make it easier to stick to your budget in the long-term.

While some people prefer spreadsheets for tracking, apps are probably much easier for most. Some of the best low cost or free Android and iOS budget trackers are;

• Spendee
• Wallet by BudgetBakers
• Mint
• PocketGuard

Autistic people often struggle with executive function, which can make this initial task quite daunting. You may have to lean on a friend or partner for a bit of support getting it all set up the first time. 

Once you have the data organized and adjusted to support your circumstances, you will have a simple list of regular payments. This structured approach will enable you to plan more effectively for the future.

Step 3 Saving

The earlier you start saving, the better. In fact, one of the key reasons why parents should give their kids pocket money (or allowance) is to foster this habit, regardless of chores. While "extra money" can be earned for chores, there should be a base level of money that children need to handle weekly. This helps them to learn to budget and save from a young age. 

As a parent, it's also important to remember that we often learn more from our mistakes than from our successes. So, it's perfectly fine if your child makes poor choices and spends all their allowance on day one – it's part of the learning process.

What is Saving?

Saving is essentially the act of separating a portion of your income for a later purpose. The earliest form of saving that children are exposed to is often money boxes (piggy banks) but with the decline of cash, banking is increasingly becoming the primary method. 

For successful saving, you generally need three types of accounts:

1. Everyday Account: From which most of your expenses are paid. 
   
   
2. Emergency Fund: This should be a top priority to build quickly. Your emergency fund should contain between three and six months' worth of essential expenses coverage. If you've already created a budget (as discussed in Step 2), this will be straightforward to calculate. 
   
   
3. General Savings Account: This account should hold whatever you can spare from your everyday account after you've contributed to building your emergency fund. Once your emergency fund is fully established, your general savings will grow much faster.

Autism and Saving Challenges

Autistic people may struggle with saving for a few different reasons. These could include difficulty with impulse control, challenges judging risk versus reward, and the sensory overload that can come from in-person banking.

While sensory issues can often be reduced by relying primarily on online banking, the other issues are not so easily resolved.

Impulse Control

Impulse control can be a real problem, particularly for people who have affordable special interests like Lego, Star Wars, books, gaming or other tangible items. The urge to "collect everything" can sometimes overrule common sense, making it easy to accidentally purchase more than you should. 

Luckily, many autistic people are very good with rules, so establishing clear personal rules to avoid impulsive spending is critical. For example, if your special interest is Lego, perhaps you limit yourself to spending no more than $100 per month. If there's something you truly want that costs more, then you commit to saving for it over a longer period.

Financial Risk vs Reward

Understanding financial risk versus reward is difficult and scams often exploit this. For example, a scam site might offer a popular Lego set at 50% off the normal price but only if you order online and within the next 24 hours. This sense of urgency and the promise of an "easy reward" can make it difficult to see the inherent risk. 

For autistic people, the fact that the special interest is such a driving force can make the temptation irresistible. It's critical to be vigilant and to understand that a reward that carries a very high risk needs to be treated with suspicion and that it is usually not worth the effort. 

The same principle applies to more conventional financial risks, such as shares (stocks). There is no such thing as foolproof "get rich quick" scheme. Empty promises from gambling such as lotteries and slot machines are also highly dangerous. Nothing is guaranteed, so you need to examine every financial decision that you make with care. 

You can't follow your heart either. While you might for example, love Nintendo, that doesn't mean that buying shares in the company will automatically be a good financial decision for you.  

Step 4 Debt management

Debt can be generally classified as "money that you owe other people." It's common for people to talk about debt in a very negative way, using phrases like "don't get into debt" or "don't borrow money." However, the reality is not quite so black and white.

Debt is a key part of modern life. Most people won't be able to buy a house without incurring debt, and increasingly, even smaller things like tertiary education and cars are becoming significant sources of debt.

Good Debt vs. Bad Debt

It is important to understand that there is good debt and there is bad debt.

Bad debt is incurred when you use schemes like "lay-buy" (known as layaway in some countries) or "buy now, pay later". It also includes using your credit card excessively to run up bills for everyday items that you can't afford to pay off quickly.

Good debt is when you borrow money for large purchases that you can't otherwise afford, and these purchases significantly improve your lifestyle or financial position (and ideally appreciate in value over time).

A house, for example, is generally considered "good debt" for two reasons. 

1. Over the long-term, property values can appreciate, potentially faster than you can save in many markets. 
2. Having a house offsets the ongoing cost that you would incur from renting. 

Buying a car that you need to get to and from your place of employment is generally considered good debt. However, buying the very latest model sports car when an older, more affordable car would do the job is typically bad debt.

Education Debt

When it comes to education debt, its classification can vary significantly by country. In some countries, it can be considered 'good debt,' while in others, it can be a significant burden.

• For instance, in Australia, government-backed university loans are designed to be repaid based on income, often without real interest (adjusted only for inflation).
  
  
• However, in many other Western countries, student loans often accrue high interest from the start and can pose a major challenge to financial independence.

Regardless of the system, pursue a degree because it aligns with a specific occupational goal you have in mind, not simply because "everyone else has one." If you can avoid turning education into a debt, do so – this might mean attending college or university part-time.

If you find you're not passing your subjects, don't persist blindly; it's better to withdraw. You can always return as a "mature-aged student" later once you have better funding or a clearer direction.

Never forget that the primary reason for pursuing tertiary education is often to enhance your career prospects. You're not there to get the highest marks or the most degrees. Obtain the qualifications you need and then focus on applying them in the workforce. For example, getting a master's or a doctorate is generally bad debt unless it definitively leads to a better position at work. Most jobs require a bachelor's degree, but fewer are specific enough to require a master's. Even fewer are inclined to offer a position to a master's student with no work experience over a bachelor's graduate with significant workplace experience.

If you're planning to pursue further tertiary education, consider doing it part-time and after you've already gained substantial work experience. Often, this approach comes with the added bonus that your workplace may be willing to pay or partially pay for the extra qualifications.

Debt Fear

A significant issue for autistic people and debt can be "debt fear." This stems from considering debt such a "bad word" that they attempt to be entirely free of it, which paradoxically can create inaction regarding major financial milestones.

For example, it is highly unlikely that anyone could buy a house in today's market without incurring debt, yet many autistic people try to save the entire purchase price. The issue is that house prices can rise so much faster than you could possibly save. By the time you've accumulated enough money to buy a house at today's price, the actual price has often risen significantly beyond your reach.

Navigating complex financial decisions requires expertise. To get ahead in life and make informed choices about large purchases, you should talk to a qualified professional, such as a financial advisor, to get sound financial advice tailored to your situation.

Next Time

Taking these initial steps towards financial independence might seem daunting, but remember, every journey begins with a single step. Focus on making just one small change today to start building your financial future.

In the next part of this series, we'll continue our exploration, looking at how to generate income, make your money work for you through investments, establish good credit, and adjust your plan for life's inevitable changes.