Liz Weston: Money errors could signal dementia

Updated 5 hours and 19 minutes ago

Some of the first signs of dementia are financial: forgetting to pay bills, for example, or having trouble calculating a tip. According to a study published last year in the medical journal JAMA Internal Medicine, people who develop dementia are also more likely to miss credit card payments and have risky credit scores years before they are. diagnosed.

Researchers linked the health records of over 80,000 Medicare beneficiaries to credit bureau data and found that people who developed dementia had a higher risk of skipping credit card payments after age six. years before their diagnosis. The study found that the chances of incurring risky credit scores – indicating multiple or severe defaults – increased as early as two and a half years before diagnosis.

Researcher Lauren Hersch Nicholas, a health economist and associate professor at the University of Colorado School of Public Health, says the study was inspired by horror stories of people suffering catastrophic financial losses due to an undetected cognitive decline.

“They and their families had no idea they were in the early stages of dementia until something happened, like the house was going to be foreclosed,” says Nicholas.

If a loved one is struggling to manage their money, there may be ways to protect their finances and credit rating while maintaining their dignity and independence. If you’re concerned about your own vulnerability to cognitive decline, you can also put some safeguards in place to protect yourself.

SIMPLIFY, AUTOMATE AND ALERT

EverSafe, a technology service that monitors the financial accounts of people looking for signs of fraud and identity theft, has clients with dozens of bank, brokerage and credit card accounts, says the co-founder and CEO of EverSafe, Howard Tischler. Even without cognitive issues, “it’s hard to stay on top,” Tischler says.

Consolidating into a bank, brokerage, and one or two credit cards can make it easier to monitor accounts. Putting invoices on automatic payment can prevent missed payments, although bank balances should always be monitored so that these payments do not drain the account, Nicholas notes.

Most accounts allow customers to set up alerts so that they are notified via text or email of low balances, transactions that exceed a limit you set, or other potential issues. Often times, you can add multiple phone numbers or email addresses so that a second person is also notified.

Alerts can be set up online or you can call the financial provider’s customer service number, says Amy Goyer, AARP’s national family and care expert. If you’re setting them up for someone else, that person will likely need to be in communication with you and authorize the changes, Goyer says. Additionally, some companies allow clients to designate a trusted person who can be contacted if unusual transactions are detected and the institution cannot get a response from the client.

Meanwhile, monitoring a credit score can alert you to missed payments or identity theft. Many banks and credit card companies offer free credit scores, or you can sign up for a free service online.

APPOINT A CO-PILOT

Estate planning lawyers say virtually all adults should have a financial power of attorney, which is a legal document that designates someone you trust to make financial decisions for you if you become incapacitated.

Beyond that, there are a number of ways to monitor finances. A senior may feel comfortable adding an adult child or other trusted person as a co-owner of a checking account, for example, or be willing to share login credentials for financial accounts. Another option is to share the login information for an account aggregation service, such as Mint or Simplifi. The trusted person wouldn’t be able to log into bank, brokerage, or credit card accounts, but could see balances and transactions.

Unfortunately, not everyone has someone they trust, and financial abuse of seniors is often perpetrated by family members. A lawyer, certified public accountant, certified financial planner, or other trustee may be willing to serve as a trusted person, Goyer says. (Trustee means they are required to put your interests ahead of theirs.)

Goyer says another option is to call the local agency on aging, which are nonprofit public or private agencies appointed by states to coordinate and deliver services to seniors. She suggests asking the agency for recommendations of people or services who are approved and experienced in helping seniors manage their money.

ADAPT TO NEED

Goyer warns against excess. Trying to take over someone’s finances prematurely can cause resentment and may not be good for them.

“Don’t take away all their freedom, their independence or their responsibility, because it’s not really good for them cognitively,” says Goyer.

When Goyer’s father struggled to manage his money, she took charge of paying the bills. But she also opened a separate checking account for her father and transferred pocket money there every month.

“He was always able to go to the grocery store, buy gas for the car, pay for mom’s hairdressing appointments,” says Goyer. “He handled it very well for two or three years. “

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This column was provided to The Associated Press by the NerdWallet personal finance website. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score”. E-mail: [email protected] Twitter: @lizweston.

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