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Are Managing Money Problems a Sign of Dementia? Yes

Updated: Dec 2, 2020

There are a number of reasons why financial decision-making skills may decline, but older adults are more likely to struggle with managing money and are more susceptible to poor investment decisions. This is may be a result of cognitive decline due to age or may be due to major neurodegenerative disorders (such as dementia). Older adults are also more vulnerable to fraud or elder financial abuse, often by relatives or telephone scammers.


Recent research by Duke University Medical Center revealed that older adults who experience problems completing simple financial tasks, such as calculating their change, may be at increased risk of Alzheimer’s disease. Problems with financial management have often been associated with later stage dementia. A new study reveals this could be one of the earliest signs of dementia and may be correlated with a build-up of amyloid plaque deposits.


Scans of two study participants show the brain of a cognitively healthy 74-year-old (top row) who demonstrated average financial skills compared to an 86-year-old with mild Alzheimer’s disease (bottom row) who demonstrated impaired financial skills. The bottom scan is positive for amyloid plaques, highlighted in yellow and orange throughout the brain and extending to its edges. The image is credited to Duke Health.


According to the Alzheimer’s Association, Alzheimer's disease is the sixth leading cause of death in the US and is estimated to affect 16 million people by 2050. One in 9 individuals over the age of 65 and one-third of people over age 85 are likely to be diagnosed by this disease.


Alzheimer's disease is one of the main forms of dementia. It involves impaired brain function that is typically characterized by the loss of short-term memory and trouble completing even basic, familiar daily tasks.


Caring for family members with Alzheimer’s disease can take an emotional and financial toll on families. Arranging for the care of a person suffering from dementia can be complex and expensive. Adding to that difficulty is that patients are often unable to manage or understand their finances.


Financial capacity is the ability to manage money and financial assets in ways that meet a person’s needs and which are consistent with his/her values and self-interest. Financial capacity is essential for an individual to function independently in our society; however, dementia can eventually lead to a complete loss of financial capacity. As the disease gets worse, the person may try to hide financial problems to protect his or her independence. Or, the person may not realize that he or she is losing the ability to handle money matters.


Many older adults can be suspicious of attempts to take over their financial matters. Family members can help the individual with Alzheimer’s feel independent by:

  • Giving them small amounts of cash to have on hand. Having access to excess cash may result in the person losing or misplacing money.

  • Minimizing the spending limit on credit cards or having the cards cancelled.


To prevent serious financial problems for the person, the family may have to take charge of the person’s financial affairs through legal provisions. It’s important that the family make sure they handle the transfer of financial authority with respect and understanding. The family can get consent to manage the person’s finances via a durable power of attorney for finances, preferably while the person can still understand and approve the arrangement.


If you think a person with Alzheimer’s may be the victim of a scam, contact your local police department.


If you live in the New Jersey or New York area and would like to schedule a neuropsychological evaluation for yourself or a family member in order to determine if there have been any potential cognitive changes that would be atypical or unexpected for your age please contact Dr. Corey Burchette at 201-577-8286 to inquire about scheduling an appointment at the New Jersey Memory Center which is located in Verona, New Jersey. Easily accessible from many points in North Jersey (including Montclair, Upper Montclair, Cedar Grove, Bloomfield, Glen Ridge, Caldwell, West Caldwell, North Caldwell, Totowa, Wayne, Little Falls, West Orange, Maplewood, Livingston, and many more).

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