The first signs of dementia may appear in your finances

new York
CNN
—

Messy financial records. Late payments and latest service outage notifications. Several daily bank withdrawals. Out of character purchases.

When a family member who has been quite responsible with his money all his life becomes careless with his finances, this may be a sign of an as yet undiagnosed illness. dementia.

Researchers from Federal Reserve Bank of New York which analyzed both U.S. credit reports and Medicare data, found that In the five years before a dementia diagnosis, a person’s average credit scores may begin to weaken and their delinquencies increase.

“The adverse financial effects of undiagnosed memory disorders exacerbate the already significant financial strain that households face after diagnosis,” the researchers write. “Beyond susceptibility to default, early stage (Alzheimer’s disease and related disorders) may affect the opening of new accounts and accumulation of debt, credit utilization and/or credit mix.”

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 are “not shocking at all.” Tidwell’s mother was diagnosed with 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 bills paid and family records organized through numerous moves while her husband pursued a career in the military.

After going through her mother’s papers this year, Tidwell surmises that her mother’s memory began to fade around 2015, because from that point on, her records became “less than perfect.”

For example, Tidwell said, his mother used to keep impeccable records of checks issued and deposits and withdrawals made in her checkbook register. But this registry has become a real disaster. “There were a bunch of things scratched off and she was adding and adding obsessively – she knew things weren’t all they could be. Later I saw that she was withdrawing large amounts from 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 piles of overdue notices and last notification warnings from service providers and insurers.

Her father was a former financial manager who “was very conservative with his money, very smart and never reckless with his money,” she said. And he strongly emphasized to his daughter the importance of paying off her credit card in full each month to avoid interest.

Yet Lemay discovered he owed $50,000 in fees, interest and late fees on a Visa card. He also financed the purchase of a new car he didn’t need, just months before police took away his driving license. Normally, he would only buy high-end used cars with cash, she said.

Plus, his daughter noted, he didn’t pay his taxes for 2021. So he ended up owing the government about $20,000, most of which was for late and underpayment penalties.

“I told 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 associated with financial behaviors that can signal dementia. Her father and mother both received different forms of diagnosis.

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 hardest thing we faced was managing our mother’s daily money as her health progressed. She was spending too much on things she didn’t need or want. Random items, cleaning supplies, fancy food. She also fell victim to phone scams – a fake insurance policy, that sort of thing,” Sibley said.

His mother also withdrew money from the ATM two to three times a day and gave it to anyone who asked.

Keenly aware of the high cost of long-term care, given her father’s situation, Sibley said she worried her mother would run out of money that would be needed for her own care.

Even though her mother’s health made her vulnerable in terms of money, at first she was still able to walk, shop, and do yoga on her own. In other words, she was able to retain a large part of her autonomy and her social connections.

To try to stem the flow of money, Sibley and her brother tried to distribute a week’s worth of money to their mother, “but she would spend it all at once,” she said. Same when they tried to distribute the money into daily envelopes.

Finally, they confiscated his payment card. But soon after, his condition worsened, Sibley said. “She wasn’t able to maintain her familiar routines and social connections. That’s when we realized there had to be a better way.”

With her husband, she founded Sibstarwhich offers a debit card in the UK that can be used by a person with dementia to maintain some sense of financial independence and social engagement. When needed, family caregivers can monitor their debit transactions via an app. As a person’s condition worsens, the caregiver can set limits on the amount of money that can be spent in 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 chances of someone squandering their 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, appointed her medical proxy and appointed the person to whom she would give power of attorney to manage her financial affairs if necessary.

This allowed, among other things, Tidwell to more easily access his mother’s bank account online in 2018 to make sure everything was okay. In 2020, she had automated the online payment of her mother’s bills.

“The time has come to make plans Before you must. It’s hard to overstate what a gift that visit to the lawyer in 2008 was for ‘my future,'” said Tidwell, who fully manages her mother’s finances now that her condition has deteriorated significantly.

Because dementia can worsen over time and a person in its early stages may not recognize that they are more vulnerable to financial mistakes and scams, the U.S. National Institute on Aging recommends that a family take steps early on to alleviate these concerns, such as setting up automated bill payments for the person with dementia.

Of course, no quantity advanced financial planning can ease the heartache of watching a loved one with dementia decline. “I prepared as best I could, but it’s still tough,” Tidwell said. That’s why she advises anyone potentially facing a similar situation to “make the easy part easy.”