Dementia takes a costly toll on the families it affects – emotionally, physically and even financially.
In many cases, the impact on finances is one of the earliest signs of illness, according to a new report from the New York Federal Reserve.
In analyzing 17 years of data from consumer credit agencies and Medicare databases, researchers found that a drop in credit scores and an increase in late payments are often seen in the five years before a diagnosis of Alzheimer’s disease and related disorders (ADRD).
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Those in the early stages of dementia may also accumulate greater debt, open new credit accounts and use multiple types of credit.
“Considering the typical progression of the disease, these findings point to the financial consequences of the disease in its earliest stages, when symptoms are usually mild and not widely visible,” the researchers wrote.
In many cases, a negative impact on finances is one of the earliest signs of illness, according to a new report. (iStock)
“Financial consequences of prediagnosis ADRD increase steadily over time.”
This is particularly worrying given that older adults with dementia are likely to face significant costs for care and other related expenses, the report noted.
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Monica Moreno, senior director of care and support for the Alzheimer’s Association of Chicago, said the new report confirms what experts already knew — that challenges managing money or personal finances are common early warning signs of dementia.
“While there are some signs or symptoms of dementia, challenges with problem solving or planning can cause a person to mismanage their finances,” Moreno, who was not involved in the New York Fed report, told Fox News Digital via email.
“Other dementia-related symptoms, including impairment or poor judgment and difficulty performing familiar tasks, can also negatively impact money management or personal finances.”
“The individual may have stacks of unopened bills or may be spending an excessive amount of money.”
Early in the disease, people may struggle with more complicated tasks, such as managing investments or making decisions about large purchases, Moreno noted.
“Since dementia is often a progressive condition, these challenges will increase over time,” she said. “It is important for family members to identify these possible signs earlier and to intervene as soon as possible”.
Common warning signs
Some common signs to look for include an inability to balance a checking account, or consistently late payments on credit cards or other monthly bills, Moreno said.
“The individual may also have stacks of unopened bills or may be spending an excessive amount of money,” she said.
Some common signs to look for include an inability to balance a checking account, or consistently late payments on credit cards or other monthly bills, one expert said. (iStock)
People living with dementia are also more susceptible to financial abuse, identity theft, fraud or get-rich-quick schemes.
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“Failure to address these potential problems or threats can place individuals living with dementia at great financial risk,” Moreno warned.
5 ways families can help
“If you think a family member is showing signs of dementia, it’s important to share your concerns and talk to a health care professional,” Moreno said. “Early diagnosis of dementia offers the best opportunity to put financial safeguards in place.”
For those whose loved ones are struggling to manage their finances, the Alzheimer’s Association shared the following tips and strategies with Fox News Digital.
1. Discuss with the person as a confidant family member or the friend can help with either paying bills or setting up automatic billing to avoid late payments.
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2. Set up a separate account where you can hold an agreed-upon small amount of money that the person can use for recreational activities, meals out with friends, or other personal purchases.
3. Sign up to receive automatic withdrawal notifications from Bank account or large credit card fees. If you set a fee or spending limit and the person spends more than that, the bank or credit card company will notify you.
People living with dementia are also more susceptible to financial abuse, identity theft, fraud or get-rich-quick schemes, experts warn. (iStock)
4. Look for electronic bank and credit card statements and watch for unusual purchases or changes in the way the person usually spends money.
5. Sign up for the Do Not Call list at donotcall.gov to protect yourself from telemarketing calls and potential phone scams.
It’s always better to have conversations about managing finances sooner rather than later, Moreno advised.
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“In the early stages of Alzheimer’s disease, people are more likely to understand the importance of these issues and questionable activities to avoid,” she said.
“If you wait, these concepts will be more difficult to grasp as memories of your relatives and other executive functioning skills decline.”
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Fox News Digital reached out to New York Federal Reserve researchers seeking comment.