Dementia's Financial Toll: Uncovering the Early Warning Signs

Dementia is a devastating condition that not only takes an emotional and physical toll on families, but also a significant financial one. A new report from the New York Federal Reserve sheds light on how the early stages of the disease can impact an individual's finances, often serving as an early warning sign of the condition.

Uncovering the Financial Consequences of Dementia

The Telltale Signs of Dementia's Financial Impact

The New York Federal Reserve's analysis of 17 years of data from consumer credit agencies and Medicare databases revealed that a decline in credit scores and an increase in late payments are often observed in the five years prior to a diagnosis of Alzheimer's disease and related disorders (ADRD). This suggests that the financial consequences of the disease can manifest long before the more visible symptoms become apparent.In the early stages of dementia, individuals may also accumulate greater debt, open new credit accounts, and utilize multiple types of credit. These behaviors can be indicative of the cognitive challenges that come with the disease, as patients struggle to manage their finances effectively.

The Escalating Financial Burden

The report's findings are particularly concerning given the substantial costs that older adults with dementia are likely to face for caregiving and other related expenses. As the disease progresses, the financial strain on families can become increasingly overwhelming.Monica Moreno, the senior director of care and support for the Alzheimer's Association in Chicago, emphasizes the importance of early intervention. "While there are several signs or symptoms of dementia, challenges with problem-solving or planning can cause a person to mismanage their finances," Moreno explains. "Other dementia-related symptoms, including decreased or poor judgment and difficulty completing familiar tasks, can also adversely affect money management or personal finances."

The Heightened Risk of Financial Exploitation

In addition to the direct financial consequences of dementia, individuals living with the condition are also more susceptible to financial abuse, identity theft, fraud, and get-rich-quick schemes. Failure to address these problems or potential threats can put these vulnerable individuals at great financial risk.Moreno warns, "Failure to address these problems or potential threats can put individuals living with dementia at great financial risk." The Alzheimer's Association emphasizes the importance of early intervention and the implementation of financial safeguards to protect those affected by the disease.

Strategies for Families to Mitigate the Financial Burden

The Alzheimer's Association has provided several strategies for families to help their loved ones manage their finances and mitigate the financial impact of dementia. These include:1. Discussing with the person how a trusted family member or friend can assist with paying bills or setting up automatic billing to avoid late payments.2. Creating a separate account where a small, agreed-upon amount of money can be kept for the person to use for personal expenses.3. Signing up to receive automatic notifications for withdrawals from bank accounts or large charges to credit cards, and setting spending limits.4. Requesting electronic bank and credit card statements to monitor for unusual purchases or changes in spending patterns.5. Signing up for the "Do Not Call" list to protect against telemarketing calls and potential phone scams.Moreno emphasizes the importance of having these conversations and implementing these strategies as early as possible, as the person's ability to understand and participate in the process will diminish as the disease progresses.The financial consequences of dementia can be devastating, but with early intervention and proactive measures, families can work to mitigate the impact and protect their loved ones from the risks associated with the disease.