Financial files in disarray. Late payments and last-warning service-cutoff notices. Multiple daily bank withdrawals. Out-of-character purchases. When a family member who has been fairly responsible with money all their lives becomes careless with their finances, it may be one sign of as-yet-undiagnosed dementia. Researchers at the New York Federal Reserve who analyzed both US credit reporting and Medicare data found that in the five years before a dementia diagnosis, a person’s average credit scores may start to weaken and their payment delinquencies rise. “The harmful financial effects of undiagnosed memory disorders exacerbate the already substantial financial pressure households face upon diagnosis,” the researchers wrote. “Beyond susceptibility to payment delinquency, early stage [Alzheimer’s disease and related disorders] may affect new account openings and debt accumulation, credit utilization, and/or credit mix.” Their findings echo the results of a 2020 study from the Johns Hopkins Bloomberg School of Public Health.
Speaking to the media, Marcey Tidwell from Bloomington, Indiana, shared her experience with her mother’s dementia diagnosis in 2020. Tidwell mentioned that her mother’s once impeccable financial record-keeping began to falter around 2015. As Tidwell went through her mother’s papers, she noticed a decline in her financial management. Her mother used to keep a meticulous record of transactions in her checkbook register, but the records became disorganized with errors and large withdrawals from savings accounts.
Karen Lemay from Ottawa, Canada, recounted noticing concerning financial behavior in her father in 2022. Her father, a former finance executive known for his prudent financial decisions, accumulated a significant amount of debt and made uncharacteristic purchases before losing his driver’s license due to dementia-related issues. The financial strain included unpaid taxes and credit card fees, highlighting the dramatic change in his financial habits.
Sharing her story, Jayne Sibley from the United Kingdom described the challenges of managing the finances of both her parents diagnosed with dementia. Sibley recalled her mother’s erratic spending behavior, susceptibility to scams, and excessive cash withdrawals, showcasing the financial implications of dementia on personal autonomy and financial stability.
Turning her experience into action, Sibley founded Sibstar, a solution that offers a debit card in the UK for individuals with dementia. The card allows for family caregivers to monitor spending and set limits to ensure financial protection while maintaining some independence for the person with dementia.
While advanced financial planning can mitigate some of the challenges posed by dementia, the emotional toll of watching a loved one deteriorate remains profound. Tidwell emphasized the importance of early preparation by setting up legal documents, such as wills and power of attorney, to navigate the complexities of managing a person’s finances when they become incapacitated due to dementia. As dementia progresses gradually, taking proactive steps, such as automating bill payments, can provide stability and alleviate financial burdens for families facing similar circumstances.
