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CNN
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Disordered financial records. Late payments and last-minute service disconnection notices. Multiple daily bank withdrawals. Unusual purchases.
When a family member If a person who has been relatively responsible with their money their entire life becomes careless with their finances, it may be a sign of as-yet undiagnosed dementia.
Researchers at the New York Federal Reserve who analyzed U.S. credit reports and Medicare data found that In the five years before a dementia diagnosis, a person’s average credit score may begin to decline and their late payments may increase.
“The adverse financial effects of undiagnosed memory impairment exacerbate the already significant financial strain that households face after diagnosis,” the researchers wrote. “Beyond susceptibility to default, the early stages (Alzheimer’s disease and related disorders) may affect the opening of new accounts and the accumulation of debt, credit use, and/or credit combination.”
Their findings echo the results of a 2020 study from the Johns Hopkins Bloomberg School of Public Health.
Marcey Tidwell, who lives in Bloomington, Indiana, said the results were “not shocking at all.” Tidwell’s mother was diagnosed with dementia in 2020 and has been living with her daughter ever since.
Tidwell said that for most of her life, her mother was an “outrageously methodical human being” who paid the bills and organized family records during numerous moves while her husband pursued a career in the military.
After going through her mother’s papers this year, Tidwell speculates that her mother’s memory began to fail around 2015, because from that point on, her records became “less than perfect.”
For example, Tidwell says, her mother used to keep a neat record of checks written and deposits and withdrawals made in her checkbook. But that record became a mess. “There were a lot of things crossed out, and she was obsessively adding and adding—she knew things weren’t quite what they could be. Later, I saw that she had withdrawn a lot of her savings, more than she needed for groceries.”
Karen Lemay, who lives in Ottawa, Canada, knew something was seriously wrong with her father in 2022 when she saw on his desk stacks of late payment notices and final notification warnings from service providers and insurers.
Her father was a former financial executive who “was very conservative with his money, very smart and never reckless,” she said. And he had strongly stressed to his daughter the importance of paying off her credit card in full each month to avoid interest.
Lemay, however, discovered he owed $50,000 in fees, interest and late penalties on a Visa card. He also financed the purchase of a new car he didn’t need, just months before police revoked his driver’s license. Normally, he only buys high-end used cars with cash, she said.
Additionally, his daughter noted, he failed to pay his 2021 taxes, owing the government about $20,000, most of which went to late payment and underpayment penalties.
“I spoke to him about some of his balances and he refused to believe that he had not paid them,” Lemay said.
Jayne Sibley, who lives in the UK, knows the pain and stress of financial behaviours that can be a sign of dementia. Her father and mother have both been diagnosed with different forms of the disease.
Her father moved into a nursing home years ago, but her mother, now deceased, remained at home, albeit with in-home care.
“The biggest challenge we faced was managing Mom’s day-to-day finances as her condition worsened. She was spending too much money on things she didn’t need or want. Sundries, cleaning supplies, fancy food. She was also a victim of phone scams: fake insurance policies, that kind of thing,” Sibley said.
His mother also took money from the ATM two to three times a day and gave it to anyone who asked for it.
Aware of the high cost of long-term care given her father’s situation, Sibley said she worries her mother won’t spend the money needed for her own care.
Although her mother’s illness left her financially vulnerable, she was initially able to walk, shop and attend yoga on her own. In other words, she was able to maintain much of her independence and social connections.
In an attempt to stem the flow of money, Sibley and her brother tried to give their mother a week’s worth of cash, “but she would spend it all at once,” she said. The same was true when they tried to divide the money into daily envelopes.
Eventually, her credit card was confiscated. But soon after, her condition worsened, Sibley said. “She was no longer able to maintain her routines and social relationships. That’s when we realized there had to be a better solution.”
With her husband, she founded Sibstar, a company in the UK that offers a debit card that can be used by a person with dementia to maintain financial independence and social engagement. If 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 on a given day or week, and where the card can be used (for example, at ATMs, online or at the grocery store).
While there are few dementia-specific financial tools to reduce the risk of someone wasting their own hard-earned money, there are steps you can take to make it easier to take control of another person’s finances when they become incapacitated.
In 2008, a year after her father died without a will and a dozen years before her mother was diagnosed with dementia, Tidwell said she and her siblings took their mother to a lawyer to make sure she had a will, named her medical proxy and named the person to whom she would give power of attorney to manage her financial affairs if necessary.
This included making it easier for Tidwell to access her mother’s bank account online in 2018 to make sure everything was okay. By 2020, she had automated online bill payments for her mother.
“The time to make plans has come Before “It’s hard to overestimate what a gift that visit to the lawyer in 2008 was to me,” said Tidwell, who now manages her mother’s finances entirely now that her condition has worsened significantly.
Because dementia can worsen over time and a person in the early stages may not recognize that they are more vulnerable to financial mistakes and scams, the National Institute on Aging recommends that families take steps early on to alleviate these concerns, such as setting up automated bill payments for the person with dementia.
Of course, no amount of advanced financial planning can ease the heartache 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 who might be facing a similar situation to, in her words, “make the easy part easy.”