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The first signs of dementia may show up in your finances
CNN New York —
Financial files in disarray. Late payments and last-minute service disconnection notices. Multiple bank withdrawals daily. Unusual purchases.
When a family member If someone who has been quite responsible with money throughout their life becomes careless with their finances, it could be a sign of an as-yet-undiagnosed illness. insanity.
Researchers from New York Federal Reserve who analyzed US credit reports and Medicare data and found that In the five years before a dementia diagnosis, a person’s average credit score may begin to decline and delinquency may increase.
“The detrimental financial effects of undiagnosed memory disorders exacerbate the already substantial financial pressure families face following diagnosis,” the researchers wrote. “In addition to the susceptibility to payment default, the early stage [Alzheimer’s disease and related disorders] may affect the opening of new accounts and the accumulation of debt, the use of credit and/or the combination of credit.”
Their findings echo the results of a 2020 study by Johns Hopkins Bloomberg School of Public Health.
Marcey Tidwell, who lives in Bloomington, Indiana, said the findings were “not even remotely shocking.” Tidwell’s mother was diagnosed with a form of dementia in 2020 and has lived with her daughter ever since.
Tidwell said that for most of her life, her mother was an “outrageously methodical human being” who kept the bills paid and the family records organized through many moves while her husband pursued a military career.
After reviewing his mother’s papers this year, Tidwell surmises that her memory began to fail around 2015, because from that point on her records became “less than perfect.”
For example, Tidwell said her mother used to keep an immaculate record of checks written and deposits and withdrawals made in her checkbook register. But that record had become a mess. “There were a lot of things crossed out and she was obsessively adding and re-adding — she knew things weren’t all they could be. Later, I saw that she took large amounts out of her savings, more than she needed for purchases.”
Karen Lemay, who lives in Ottawa, Canada, knew something was really wrong with her father in 2022 when she saw on his desk stacks of late payment notices and final notice notices from service providers and insurance companies.
Her father was a former financial executive who “was very conservative with his money, very smart about it and never reckless with it,” she said. And he had strongly impressed upon his daughter the importance of paying off her credit card in full each month to avoid interest.
However, Lemay discovered he owed $50,000 in late payment fees, interest and charges on a Visa card. He also financed the purchase of a new car he didn’t need, just months before the police took away his driver’s license. Normally, he would only buy high-end used cars with cash, she said.
Additionally, his daughter noticed that he failed to pay his 2021 taxes. So he ended up owing the government about $20,000, most of it for late fees and underpayment penalties.
“I spoke to him about some of his balances and he refused to believe he hadn’t paid them,” Lemay said.
Jayne Sibley, who lives in the UK, knows the pain and stress of dealing with financial behaviors that can signal dementia. Both her father and mother were diagnosed with different forms of it.
Her father moved into a nursing home years ago, but her mother, now deceased, remained in her own home, albeit with in-home care.
“The most challenging thing we faced was managing Mom’s day-to-day finances as her condition progressed. She would spend too much on things she didn’t need or want. Random items, cleaning supplies, luxury food. She was also the victim of phone scams — a fake insurance policy, that sort of thing,” Sibley said.
His mother also took money out of the ATM two to three times a day and gave it to anyone who asked.
Aware of how high the costs of long-term care were given her father’s situation, Sibley said she was worried her mother would spend the money that would be needed for her own care.
Although her mother’s condition made her financially vulnerable, she was initially still able to walk, shop, and go to yoga on her own. In other words, she was able to maintain much of her autonomy and social ties.
To try to stem the outflow of money, Sibley and her brother tried distributing a week’s worth of money to their mother, “but she would spend it all at once,” she said. The same thing happened when they tried to divide the money into daily envelopes.
Eventually, they took away her credit card. But soon after, her condition worsened, Sibley said. “She couldn’t maintain her family routines and social connections. That’s when we realized there had to be a better way.”
With her husband, she founded Star brotherwhich offers a debit card in the UK that can be used by a person with dementia to maintain some sense of financial autonomy and social engagement. When needed, family carers can monitor their debit transactions via an app. As a person’s condition worsens, the carer can set limits on how much money can be spent in a given day or week, and where the card can be used (e.g. at ATMs, online or at the supermarket).
While there are few dementia-specific financial tools that reduce the chances of someone wasting their hard-earned money, there are steps you can take to make it easier to take control of someone else’s finances when they become incapacitated.
In 2008, a year after her father died without leaving a will and a dozen years before her mother was diagnosed with dementia, Tidwell said she and her siblings took her mother to a lawyer to ensure she had a will, named her medical representative and named the person to whom she would give power of attorney to handle her financial affairs, if necessary.
This made it easier for Tidwell to, among other things, gain online access to her mother’s bank account in 2018 to make sure nothing was wrong. By 2020, she had automated her mother’s bill payments online.
“The time to make plans is before you need them. It’s hard to overstate what a gift that trip to the lawyer in 2008 was to future me,” said Tidwell, who is fully managing her mother’s finances now that her condition has worsened considerably.
Because dementia can worsen over time and because someone in the early stages may not recognize that they are more vulnerable to financial mistakes and scams, the U.S. National Institute on Aging recommends that families take steps early on to alleviate these concerns, such as setting up automatic bill payments for the person with dementia.
Of course, no amount of advanced financial planning It can ease the sadness of watching a loved one with dementia decline. “I’ve prepared as best I can, but it’s still hard,” Tidwell said. That’s why she advises anyone potentially facing a similar situation to, in her words, “make the easy part easy.”