A study by Johns Hopkins University found that people with dementia had problems managing their finances as much as six years before their diagnosis. It showed up in missed credit card payments and lower credit scores. Research suggests financial mistakes may be one of the earliest red flags of cognitive decline. By recognizing the signs early, families can step in before a crisis develops or significant money is lost.
How Do You Know If Your Loved One Needs Help?
It’s difficult to know exactly when it is time to help a loved one, but watching for common red flags is key.
1. Unopened Mail Is Piling Up. Bills, bank statements, and important notices are left unopened, ignored, and/or stuffed in drawers.
2. Late Payments or Missed Bills. Past due notices are arriving, interest charges are being added to bills, and services are being cut off for nonpayment.
3. Confusion About Everyday Financial Tasks. Your loved one is asking questions or making mistakes involving online banking, ATMs, writing checks, balancing a checkbook, or routine purchases.
4. Duplicate Purchases or Excessive Spending. The same item is purchased multiple times, or spending on unnecessary items increases, especially products promoted on TV or online.
5. Struggles to pay for usual expenses. Your loved one no longer seems to have the money to pay for groceries, medication, home maintenance, and other essentials for unclear reasons.
6. Increased Vulnerability to Scams. You discover your loved one is giving personal information or money to strangers or suspicious “friends”. This may include responding to questionable charities, get-rich-quick schemes, phishing emails, or other scams.
7. Difficulty Keeping Track of Paperwork. Legal, financial, and other important documents are being misplaced or discarded.
8. Unusual Bank or Investment Activity. There are large bank withdrawals, unexplained transfers or checks written, and/or sudden changes in spending, saving, or investing patterns. Banks may also flag suspicious transactions or charge overdraft fees.
9. Avoiding Conversations About Money. Your loved one is secretive, anxious, or defensive when questioned about financial matters.
10. Family Members Are Quietly Stepping in More Often. You or other family members are increasingly helping with reminders, phone calls, paperwork, organizing financial documents, or other routine tasks.
One of these alone may not indicate dementia, but multiple ones or sudden changes in behavior shouldn’t be ignored.
What Should You Do If You Notice These Red Flags?
The first step is to discuss your concerns. Your loved one has probably noticed problems but may be in denial about how bad it is or afraid or embarrassed about needing help. You want to be respectful and empathetic. Rather than trying to take full control over their finances, talk about how you can assist.
Your loved one may still be capable of handling many financial tasks but may benefit from oversight and support. Setting up automatic bill pay and shared online account access can help prevent problems with minimal conflict. These safeguards can also be useful in the event of an accident or sudden illness.
If your loved one refuses to acknowledge the problem, explain the potential consequences. Unpaid bills can lead to late fees, lower credit scores, utility shutoffs, lost insurance coverage, lawsuits, and even foreclosure.
Fraud and scams are also a major concern. Many older adults have lost savings or gone into debt after falling victim to scams, identity theft, or computer fraud.
How Can a Daily Money Manager Help?
If you are still having trouble addressing financial issues with your loved one, it may be beneficial to bring in a neutral party, like a daily money manager. I have advised families about the importance of monitoring routine financial activity and how best to implement a process that works for everyone.
My role can be purely consultative, or I can review or handle your loved one’s day-to-day financial tasks. This can be a good compromise because picking one family member to control financial matters can lead to conflicts with other family members. Your loved one can even designate which family members get financial reports.
These situations are never easy. If you have aging loved ones, start discussing finances and future wishes before problems arise. Make sure powers of attorney are in place, bills are organized, and important “just-in-case” information is documented. Having these conversations early can make it much easier to address changes if the need arises later.
If your loved one is having problems managing daily financial matters, contact me for a free consultation to discuss how I can help.
