Dementia Red Flags: Watch for These Financial Warning Signs in Loved Ones!

Learning that a family member has dementia can be deeply distressing. However, recognizing the symptoms early can lead to more effective management of the condition. An interesting insight from research is that financial mismanagement often precedes the formal diagnosis of dementia. According to a study conducted by Johns Hopkins researchers, individuals who are later diagnosed with dementia tend to start missing bill payments up to six years before they are clinically diagnosed. This suggests that financial difficulties can be an early indicator of the disease.

The repercussions of these early financial difficulties are significant. The research indicates that missing payments can lead to lower credit scores, defined here as 619 or below, which in turn can restrict an individual’s ability to borrow money. This pattern of financial impairment is largely unique to dementia when compared with other health conditions. Lauren Nicholas, a former health policy professor at Johns Hopkins, noted that dementia is the only condition that consistently leads to financial difficulties before it is formally recognized by medical professionals.

By the year 2050, it is estimated that up to 12.7 million Americans aged 65 and older will have Alzheimer’s disease or similar disorders, according to the Alzheimer’s Association. With such a high prevalence, it’s important to be aware of the potential financial impacts of dementia. Consequently, we’ve identified several financial warning signs to monitor.

More From Citizen News Paper How To Budget: Create A Household Budget in 4 Simple Steps

Financial Warning Signs of Dementia

1. Bill Payment Delinquencies

Consider the various bills you pay each month — such as credit card, mortgage, utilities, or even quarterly taxes if you are self-employed. An individual with dementia might forget a bill’s due date or no longer grasp the importance of paying on time. This was highlighted in a report by the Federal Reserve Bank of New York.

“Such delinquencies might stem from the cognitive lapses typical of dementia, such as forgetting to pay a bill, or could reflect the disease’s impact on financial decision-making,” the researchers explained in their May 2024 study.

2. Declining Credit Score

If you notice a sudden decline in a normally reliable credit score, it could be a sign of underlying health issues rather than just financial mismanagement. The study from the Federal Reserve Bank of New York noted a significant drop in credit scores and an increased likelihood of payment delinquency in the five years preceding an Alzheimer’s diagnosis.

3. Credit Card Rejections

Changes in financial habits, especially for someone who has always been meticulous about their finances, can be telling. An unpaid bill can lead to a lower credit score, which in turn can result in a denied credit application. The Federal Reserve Bank of New York further explains that such financial behaviors can have immediate consequences, such as late fees and higher interest rates, and long-term effects like reduced access to credit.

4. Unusual or Unnecessary Purchases

Unexpected purchases or a sudden accumulation of goods can be a red flag. These behaviors, as noted by the National Institute on Aging, may indicate a lack of awareness in financial decision-making. It’s prudent to review financial statements if there are concerns about a loved one’s spending habits.

More From Citizen News Paper Get Your Finances Together This Year With One of Our Favorite Budgeting Apps

5. Unaccounted For Money

Missing funds can be another indicator of dementia. This could be due to forgetting cash withdrawals or failing to maintain accurate financial records. If someone complains about missing money, it may be worth considering cognitive decline as a possible cause.

6. Neglecting Budgeting Practices

Sometimes the issue isn’t missing money, but a failure to adhere to established budgeting practices. Researchers focused on aging have identified this as a key sign of potential cognitive issues.

7. Repeated Queries

If a person keeps asking the same questions, like whether they’ve made a call to their bank, it could suggest memory problems. This is especially relevant if they seem to forget financial transactions or discussions soon after they happen.

8. Struggling with Simple Calculations

Difficulty with basic math or remembering essential information could be symptomatic of dementia. This might manifest as taking longer to calculate a tip or complete financial forms, as noted by the AARP’s BankSafe Initiative. Banks may also make special accommodations for customers showing signs of cognitive decline.

More From Citizen News Paper Our Picks for The Best High-Yield Savings Account for This Month

9. Significant Shifts in Financial Attitudes

A drastic change in financial behavior, such as a conservative investor suddenly engaging in risky day trading, can be a sign of cognitive issues. Angie O’Leary of RBC Wealth Management emphasizes the importance of recognizing these changes early, as they can indicate the onset of dementia.

10. Becoming a Target of Financial Fraud

Elderly individuals, particularly those with memory issues, are often targets for financial scams. Warning signs include unexpected calls or emails claiming prizes, demanding payments, or offering questionable financial opportunities. If a loved one falls prey to such scams and shows other signs of memory issues, it may be time to intervene and provide support.

More From Citizen News Paper