Dementia Affecting Finances is Common — Here’s How to Spot It

Discovering your loved one has dementia is a heartbreaking moment. But early diagnosis is actually key to better outcomes, and the early signs of the condition often show up in people’s finances. Medicare beneficiaries who are later diagnosed with dementia are more likely to “miss payments on bills as early as six years before a clinical diagnosis,” based on a study led by researchers at Johns Hopkins. So, dementia affecting finances is common.

These changes in financial behavior unsurprisingly lead to negative consequences down the line. Researchers found that missed payments led to a heightened risk of low credit scores, usually defined as 619 and under. Low credit scores can limit a person’s borrowing capacity. Research also shows that, compared to other medical conditions, dementia is almost exclusive in leading to these types of financial issues. 

“We don’t see the same pattern with other health conditions,” said then-Johns Hopkins health policy professor Lauren Nicholas in the release. “Dementia was the only medical condition where we saw consistent financial symptoms, especially the long period of deteriorating outcomes before clinical recognition.”

By 2050, the number of Americans 65 and older with Alzheimer’s or related disorders is projected to reach 12.7 million, per the Alzheimer’s Association. Dementia affecting finances could happen to anyone, so we gathered a list of things to watch out for. 

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Signs of Dementia Affecting Finances

1. Missing payments on bills 

Think about how many bills you pay in a month — your credit card bill, mortgage, electricity, water or maybe quarterly taxes if you work for yourself. Someone with dementia may not even realize their bill is due — or that they haven’t paid it yet. Still, they may realize the bill is due, but no longer understand why meeting the deadline is important. 

At least, that’s what researchers found in a report from the Federal Reserve Bank of New York. 

“Delinquency may be the product of cognitive inattention associated with the disease — i.e., forgetting to pay bills — and may also or alternatively reflect the disease’s effect on decisions related to debt initiation and structure,” noted researchers in the May 2024 study.

2. Sinking credit score 

Did you notice your loved one’s normally pristine credit score is sinking? There may be a medical reason for that as opposed to a merely financial one. Researchers at the Federal Reserve Bank of New York found increased deterioration of credit scores and heightened probability of payment delinquency in the five years before a diagnosis of Alzheimer’s or related disorders. 

3. Denied a credit card 

When looking out for a loved one, it’s important to put their behavior in context. If they’ve always been careful with their money and paid bills on time only for that to abruptly change, it’s a good indicator something is amiss. 

There is likely a chain of events here. First, a bill goes unpaid, then, a credit score goes down, finally, a credit card is denied. As the Federal Reserve Bank of New York notes: “Immediate pecuniary costs include late fees and interest charges associated with payment delinquency, while future costs may include reduced access to the credit market and less advantageous terms of available credit such as restricted credit limits because credit scores are used by lenders in pricing credit higher interest rates on credit cards and personal loans.” 

Basically, paying late fees and interest isn’t great as it is, but not catching this could have a deeper impact on their finances long term. 

4. New or strange purchases 

Are you coming home to boxes stacked by the front door, seemingly for no reason? Did your usually financially conservative loved one buy an expensive car they don’t even need?  

Lots of unnecessary purchases on a credit card and unexpected new goods in the home, per the National Institute on Aging, are potential signs someone is unaware of their decision making. It’s worth checking bank statements and financial records of your loved one if you’re concerned. 

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5. Missing money 

Disappearing funds is another sign of dementia affecting finances. This may happen because your loved one doesn’t remember withdrawing money from their bank account or hasn’t correctly balanced their checkbook. Either way, if your relative complains to you about a missing chunk of funds, consider that it may be a sign of something else entirely. 

6. Forgetting to budget 

Other times, it may not be that money is missing. It may simply be that your relative has completely dropped their monthly budgeting practice and isn’t putting money where it should go. In fact, this is one of the signs specifically referenced by aging researchers. 

7. Asking for the same information over and over

Did your mother tell you she was waiting to hear back from her bank only to call them four times, always repeating the same question? If you notice your loved one is almost immediately forgetting they already completed routine tasks, particularly financial ones, this could be an indication that they have a memory problem. 

8. Having trouble with simple math or recalling basic information 

Is it a struggle for them to come up with a tip amount at restaurants? Even taking longer than normal to fill out a financial form is a potential sign of dementia, according to AARP’s BankSafe Initiative. Bank employees also may leave notes in the accounts of customers who need special assistance. 

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9. Big changes in financial opinions 

Much like a string of unknown boxes arriving at your once frugal dad’s house, it’s important to look for signs of a shift in how your relative makes financial decisions. RBC Wealth Management indicates that a change in risk profile, i.e. someone who once had a conservative stock portfolio but now wants to go all in, is worth noting. 

“The sooner you can identify this the better,” said Angie O’Leary, head of Wealth Planning at RBC. “Since these are higher order brain functions, they are some of the first signs that someone may be suffering from dementia.”

This can go both ways, according to O’Leary. A conservative investor could become a sudden day trader. Or, someone who used to go all in on their stock portfolio is no longer interested. 

10. Victim of financial fraud

It’s no secret financial scams are getting more advanced, and fraudsters often look to target seniors. Memory problems make it even more likely your loved one could fall victim to these scams. Look out for unsolicited email and phone calls, according to Kensington Park Senior Living, that might claim a sweepstakes win, threaten punishment for unpaid taxes or offer money in exchange for little else. If you discover your relative has been harmed by one of these scams and you’ve already noticed memory issues, this may be the time to investigate.

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