A Surprising Warning Sign of Dementia: Money Problems

Late bill payments and declining credit scores can be warning signs of early stages dementia. Here’s the link between money and cognitive problems, plus practical tips for managing money in midlife and retirement.

An insightful study called “The Financial Consequences of Undiagnosed Memory Disorders” shines a light on something we might not usually connect: our money and our cognitive health. We – especially women – have good reasons to worry about running out of money.

When I was working on my Master of Social Work (MSW), I discovered that money was a significant concern for people with dementia . I did an internship as an Alzheimer’s Support Education Coordinator with the Alzheimer Society of Vancouver, BC. I helped develop and deliver information sessions to teach people how to recognize the warning signs of early stages dementia. 

Everyone had the same question: how do you know if you have dementia? What are the early warning signs of Alzheimer’s or Lewy body dementia? After all, we all forget where we put our keys or where we parked the car at the grocery store. And sometimes we forget to pay the heat, water or property tax bill, or neglect to deposit our latest check in the bank.

However, there’s a difference between not remembering where you parked your car because you were checking your text messages versus not paying your credit card bill for three months. Even worse, some people with early stages dementia are particularly vulnerable to financial scams and investment schemes. 

Early Financial money Signs of Dementia What You Need to Know

If you have experience with dementia and financial problems, please share your experience below. Your thoughts on money management for people with a cognitive health issue are valuable, and can help us understand more about how dementia is experienced. 

What is dementia?

Dementia is a term that covers a range of medical conditions that cause a decline in cognitive function. As I learned from working with the Alzheimer Society, Alzheimer’s disease is the most commonly known form of dementia.

Cognitive dementia isn’t just about forgetting things, as this new research study (The Financial Consequences of Undiagnosed Memory Disorders) points out. This disease affects memory, thinking, reasoning, and social abilities—all of which affects our financial health, money management, and retirement planning. Dementia also affects our personality, relationships, and ability to find joy, meaning and peace in life.

What are the symptoms of dementia? 

  1. Memory Loss: Often, the earliest and most noticeable symptom is forgetting recent events or information. This might manifest as repeatedly asking the same questions or forgetting important dates and appointments. For example, a person might forget a conversation they had just a few minutes ago or misplace items like keys and not remember where they put them.
  2. Difficulty Communicating: Struggling to find the right words or follow conversations. This can lead to frustrating situations where a person can’t articulate their thoughts or loses track of what others are saying. For instance, they might call a “watch” a “hand clock” or struggle to follow the plot of a movie or the thread of a conversation.
  3. Impaired Reasoning: Trouble with planning, problem-solving, or handling complex tasks. This can make managing finances, cooking, or driving more challenging. Someone might have difficulty following a recipe they’ve used for years or making decisions, such as what to do if they get a flat tire.
  4. Changes in Mood or Behavior: Experiencing mood swings, depression, or changes in personality. A typically cheerful person may become unusually irritable, anxious, or suspicious. They might also show less interest in activities they used to enjoy, such as hobbies or socializing with friends and family.
  5. Disorientation: Confusion about time or place, such as getting lost in familiar environments. This can lead to wandering or the inability to recognize familiar locations and people. For example, a person might forget what day it is, where they are, or how they got there, even if they are in a familiar setting like their own home or neighborhood.

Now new research is showing that there are serious financial implications of undiagnosed memory disorders. However, the good news is that if we’re aware of the link between money problems such as declining credit scores, missed or late bill payments, and lost bank account information, we can prevent serious issues from arising later in life.

This study—The Financial Consequences of Undiagnosed Memory Disorders—was conducted by a group of smart folks from Georgetown University and the Federal Reserve Bank of New York. They looked into how undiagnosed memory disorders and dementias such as Alzheimer’s disease can impact our financial well-being. It turns out that the clues can start showing up in our credit scores and bill payments long before we notice any memory problems.

When I wrote Should You Lend Money to Family Members?, the possibility of an older relative mishandling money because of dementia didn’t occur to me.

Early financial warning signs

The researchers dug through a ton of data from Equifax credit reports and Medicare records, covering nearly two decades. What they found is eye-opening: people’s credit scores start to dip and they begin missing payments several years before they get diagnosed with Alzheimer’s or similar conditions. 

This financial slide affects all kinds of debt, especially mortgages and credit cards. For instance, credit card delinquency rates climb more than five years before a diagnosis, and mortgage troubles appear about three years before. It’s a slow but steady decline that becomes more pronounced as the diagnosis date gets closer.

Racial and gender disparities

The study highlights that African American individuals tend to experience a sharper decline in their credit scores and a higher rate of missed payments compared to non African Americans. 

After a dementia diagnosis, women face more significant financial challenges than men. This is probably because of the different roles we play in caregiving (women) and household money management (men). 

As I shared in How I Invested Money After Separating From My Husband, I discovered firsthand the negative implications falling into traditional financial roles.

Practical implications for midlife women

So, what does this mean for us? Well, it suggests that keeping an eye on our financial health could be a smart way to catch early signs of memory issues. 

If you or someone you love starts having trouble with credit scores or bills, it might be worth looking into it further. This early detection can make a big difference! Not only will recognizing the early warning signs of dementia help with managing the condition better, it’ll help alleviate the extra stress of financial problems down the line.

Protect your financial health

The study also calls for better financial protections for people at risk of memory disorders—including people who are already struggling with dementia. Ideas like external financial monitoring, financial “driver’s licenses,” and advance directives could help manage the financial risks that come with cognitive decline.

Our finances are more than just bank account statements and debt that affect our current and future financial health. Money management can be an early indicators of the future of our cognitive health.

In this blog post, I shared research that shows how and why money management problems can be the first warning clue of dementia. If you have other questions about living with cognitive health issues, please ask below. I’d love to continue researching this topic, and will share helpful tips.

Also, we need first-person experiences to help us understand and live with this disease, especially when financial matters and future retirement planning is at stake. Feel free to share your story below.

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  1. My boyfriend, who is 65, is preparing to retire. Part of his preparation will be filing for bankruptcy and walking away from his home/mortgage. He own a really nice motorcycle which we both enjoy. He has asked me to buy his bike in order to protect it from the bankruptcy. This purchase would equate to my paying him 10,000.00 and then making payments of 250./mo for sometime.

    We have know each other for about 8 months now and I really do like him a lot, but this request has made me uncomfortable. He is a very generous person, but he is not good with money as evidenced by his need to file for bankruptcy at this stage of the game. His mother has dementia – Alzheimer’s disease I believe – and sometimes I wonder if my boyfriend also has memory issues. He forgets everyday things and before I read your article I wondered if maybe dementia runs in his family.

    Anyway, this is about the money more than the dementia. I’m retired, as well and on a fixed income, this is a lot of money for me. I currently carry 11,000.00 in debt that I am currently trying very hard to pay down. I also have a savings account with about 12,00.00 in it at present. Though I do have stock I could sell if need be, I don’t feel that is very wise of me to sell any stock at this time.

    My problem is that I do think the world of him, but his mismanagement of his own money make me very uncomfortable in trustuing his ability to repay me.

    Do I go with my gut feeling? How would I explain my reasoning to him without hurting our relationship?

    1. Brandy, hello!

      It’s understandable that you’re feeling conflicted about your boyfriend’s request, especially given the significant financial implications for your future and the relatively short time you’ve known each other.

      It’s crucial to listen to your gut feeling. You know yourself, your boyfriend and your relationship best. You’ve picked up on signals that you may not even consciously be aware of – such as the possibility of dementia affecting your boyfriend’s finances (and, if you lend him money, your own financial future).

      Taking on this financial burden, especially when you already have debt and are on a fixed income, could jeopardize your financial security. I myself wouldn’t lend my boyfriend money, but I tend to over-value security and cling to my money 🙂

      Your concern about dementia is also very valid. It’s natural to worry about your boyfriend’s health, especially since his mother has Alzheimer’s. Memory issues can be concerning, and it’s important to address these observations with care. If you’re noticing significant forgetfulness or behavioral changes – especially with regard to money – it might be worth encouraging him to speak with a healthcare professional.

      About lending him money: be honest about your financial situation. Explain that you’re working hard to pay down your own debt and that taking on additional financial responsibilities would put a strain on you. Stress the fact that you’re on a fixed income, thinking about retirement, and need to prioritize your financial stability.

      It’s okay to mention that you’re uncomfortable with your boyfriend’s plan to make such a significant purchase, especially given his current financial situation and the uncertainties surrounding it. You can gently suggest that it might not be the best time for either of you to make such a large financial commitment.

      If protecting the motorcycle is important to him, perhaps he can explore other options, such as storing it with a trusted friend or family member. This shows that you’re supportive and willing to help your boyfriend find a solution, even if you can’t take on the financial burden yourself.

      You could say something like:

      “I’ve been thinking a lot about your request to borrow money, and I want to start by saying how much I value you and our relationship. I appreciate your generosity and the time we spend together. However, I’ve been working hard to manage my own finances, and I’m currently paying down debt while living on a fixed income. Taking on a significant financial commitment like buying the motorcycle would put a strain on me and potentially jeopardize my financial stability. I hope you understand that my decision is not a reflection of how I feel about you, but rather a practical necessity for my own financial health and future retirement. I can’t lend you money, but will support you as you find other ways to buy the bike.”

      Remember, it’s important to prioritize your own financial well-being and to communicate openly and honestly in your relationship. If he truly cares for you, he will understand your concerns and respect your decision.

      If you’re still struggling, you might find this Midlife Blossoms blog post helpful: “Should You Lend Money to Family Members?”

      Wishing you all the best,

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