OPINION

JUST PLAIN TALK: Erratic finances can be early sign of dementia

Buz Livingston
Buz Livingston

Dementia is a catch-all term for conditions associated with the decline in mental abilities, often severe enough to interfere with daily life. The most common cause of dementia is Alzheimer's disease, affecting over 6 million Americans and killing more than 130,000 annually. However, many people have mild symptoms for years before being diagnosed. Some studies indicate aberrant financial behaviors may be an early sign.  

Carole Roan Grentz, Ph.D., co-authored a study on early-stage Alzheimer's patients and household finances. She argues we have a personal financial safety net that can be frayed or weakened by the disease. For example, organizational skills and memory can suffer with people falling behind on their bills or making unwise purchases and investments. Her work, published in 2019, found people with early-stage Alzheimer's were 27 percent more likely to experience a significant decline of investment assets. With long-term care expenses, a smaller portfolio could affect a surviving spouse's ability to maintain their standard of living. 

Another study from JAMA Internal Medicine tracked credit card payments and scores using Medicare and the Federal Reserve Bank of New York/Equifax Consumer Credit Panel data. Researchers found people later diagnosed with Alzheimer's started missing bill payments up to six years before clinical onset. In addition, sub-prime credit scores were also a precursor to an Alzheimer's diagnosis. One of the authors, Dr. Lauren Hersch Nicholas, was "surprised" the data was that clear.  

Signs someone may be struggling with early-onset Alzheimer's are unpaid bills, unopened bank statements, unusual credit card activity, or unexplained merchandise. Sometimes, people go on spending binges or exhibit other out-of-character behavior. The social isolation from COVID-19 may have masked problems and made it more difficult for family members to observe. 

As we get older, simplifying your finances makes sense. Heck, even young people can benefit. So simplify when you are young and don't change. Have fewer bank accounts and credit cards. It doesn't matter if you are 38 or 83; a dozen mutual funds is too many.   

Privacy laws and regulations restrict what information can be disclosed. Make sure your attorney, financial planner, bank officer, or accountant has permission to contact a relative or trusted third party should you exhibit unusual or out-of-character activities. 

For someone diagnosed with early-onset Alzheimer's, either cancel all credit cards or put a monthly limit on purchases. Remove Amazon and eBay apps off your phone. Since the disease has no cure, people have to live with it, but they don't have to be defined by it. One option is to set up a system where people can spend a specific amount monthly and are limited from impulse purchases. When one partner is diagnosed, couples can work together to manage monthly bills. Consider therapy for the patient and the caregiver. 

While 6 million people with Alzheimer's is significant, there are over 46 million Americans older than 65, COVID-19 is four times as deadly as Alzheimer’s over the last 15 months. 

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230..