Money and memory problems often go hand in hand. So if your parent or loved one has been diagnosed with Alzheimer’s disease or dementia, your loved one could be struggling to stay on top of money matters. Small mistakes could easily become big financial problems if not caught soon enough. That’s why it’s important for you or other family members to be keeping an eye on your parent’s finances.
Here are 10 common money mistakes that people with dementia make. Keep an eye out for these missteps then take action to prevent them from hurting your parent’s financial well-being.
Late or missed bill payments
Researchers at Johns Hopkins found that those with Alzheimer’s disease and related dementias were more likely to miss bill payments six years before a diagnosis. Missed payments become even more prevalent after a diagnosis, according to the study. That’s why someone needs to make sure your parent’s bills are being paid.
How to spot missed payments: Start by checking your parent’s mail for late payment notices. Review your parent’s bank statements from the past year to see what payments were regularly made and whether some stopped being made. Also check your parent’s credit report to see the payment history for loans and lines of credit your parent has and whether there are accounts that are past due. You also could use technology such as Carefull to monitor your parents accounts 24/7 for late and missed payments. The Carefull app will send you text and email alerts when it spots something wrong.
How to stop missed payments: Make a list of all of your parent’s monthly bills and set up automatic payments for as many as possible. Also look in your parent’s financial documents and bank statements for payments that are made quarterly, semiannually and annually—such as insurance premium payments—and automate those, if possible. Make sure you, another family or trusted caregiver is checking your parent’s mail for infrequent bills, such as medical bills.
Paying bills multiple times
While some with dementia forget to pay bills, others tend to pay the same bill two or three times because they don’t remember paying it the first time. Then they risk running out of money before the end of the month.
How to spot duplicate payments: Check your parent’s bank statements, online account or check register to see if there is a pattern of duplicate payments.
How to stop duplicate payments: When you set up automatic bill payments for your parent, make sure you enter your email address to receive electronic statements and opt out of having paper statements sent to your parent. Otherwise, your parent might think it’s a bill and will pay it twice.
Trouble balancing the checkbook
Difficulty working with numbers is an early symptom of Alzheimer’s disease, according to the Alzheimer’s Association. If your parent pays by checks and struggles to balance the checkbook as a result of dementia, your parent could overdraw his or her checking account.
How to spot checkbook errors: Volunteer to help your parent review the checkbook register just to “make sure everything is in order.” Look for mathematical errors and check numbers that are out of sequence, which could indicate that your parent is not recording all of the checks that are written.
How to stop problems with balancing the checkbook: If your parent is bouncing checks and putting his or her financial well-being at risk because of trouble balancing the checkbook, you might need to take the checkbook away and replace it with a prepaid debit or credit card. The card will have a limit on the amount that can be spent, which can help keep your parent out of financial trouble.
Changes in spending habits
Dementia can affect judgement and financial decision-making. So be wary if your once-frugal parent is now spending a lot. Left unchecked, your parent’s spending could put his or her finances at risk.
How to spot changes in spending habits: New clothes, new jewelry, and new items in and around the house could be a sign that your parent’s dementia has led her to loosen her purse strings. Also, be on the lookout for signs that your parent has drastically reduced spending. This could be a sign that your parent was conned out of money and now is struggling to make ends meet.
How to stop spending problems: You could help your parent create a budget, but your parent’s dementia will likely make it difficult to stick to a budget. Instead, give your parent a cash allowance—call it “spending money”—or replace the debit and credit cards your parent regularly uses with a prepaid debit or credit card to limit spending.
Duplicate or unusual purchases
Your parent might purchase the same item again and again as a result of memory loss. Unusual purchases, such as unnecessary medical equipment, could be a sign that your parent was conned into buying them.
How to spot duplicate purchases: Frequent visits with your parent should allow you to see if your parent has several of the same items. If your monitoring your parent’s bank account online, look for recurring purchases in the same amount from the same company. The Carefull app also will flag duplicate payments and unusual transactions.
How to stop duplicate purchases: Some duplicate purchases could be the result of your parent unintentionally signing up for subscription services or recurring purchases. Cancel those subscriptions by calling customer service. If your parent has been pressured into making unnecessary purchases, ask your parent to consult with you before making purchases. You could say something like, "The next time you're thinking about buying something, reach out to me so I can help you decide whether it's a good deal."
Forgetting to open the mail
Piles of unopened mail could be a sign that your parent is having trouble staying organized and that bills aren’t being paid.
How to spot unopened mail: It might be as simple as stopping by and looking on the dining room table or kitchen counter for mail that hasn’t been opened. However, your parent might be stashing unopened mail in purses, drawers, cabinets and closets.
How to stop mail from piling up: You or other family members should check in on your parent regularly to go through the mail. If you are your parent’s power of attorney, you could reach out to service providers, insurance companies, financial institutions and other companies your parent has accounts with and ask that correspondence be sent to you.
Excessive charitable contributions
Your parent might start making large, frequent or out-of-the ordinary donations that could end up hurting his or her financial well-being.
How to spot excessive contributions: Monitoring your parent’s bank account is an easy way to catch frequent contributions. The Carefull app also will alert you to charitable contributions and political donations that your parent is making. Otherwise, be on the lookout at your parent’s home for solicitations that come in the mail and for gifts that organizations typically give donors, such as notepads, address labels and greeting cards. Lots of requests for donations and trinkets are signs that your parent already has been giving away money.
How to stop excessive contributions: Talk to your parent about which organizations and causes he or she cares about most. Help your parent narrow it down to just a few. Then come up with a budget for giving—a certain amount your parent can afford to donate to each of the organizations he or she wants to support. Make a list of those organizations with the amount that can be donated and hang up it by the phone, on the refrigerator or someplace obvious as a reminder. Tell your parent to refer to the list every time he or she gets a call or letter. If a donation request comes from an organization that isn't on the list, tell your parent to say something like, "I'm sorry, but I've already committed to supporting other organizations. Thank you. Goodbye."
Cash in the cookie jar (or under the mattress, behind pillows, in books) is a red flag that dementia might be making your parent suspicious enough to hide money. The risk is that your parent might not be able to find the money when he or she needs it.
How to spot hidden money: Play detective when you visit by peaking into drawers, under the mattress, in vases or behind cushions. Or you could offer to help with spring cleaning as a way to go through nooks and crannies.
How to stop your parent from hiding money: If you find hidden money, offer to go with your parent to the bank to deposit it in a savings account. Do not offer to take it yourself for safe keeping. This will only fuel your parent’s paranoia if your parent has become suspicious as a result of dementia.
Money missing from the bank account
Your parent might withdraw cash then forget how he or she spent it. The bigger problem is large withdrawals that your parent can’t explain. This could be a sign that your parent is a victim of a scam.
How to spot missing money: Monitor your parent’s bank account online and set up alerts on the account to be notified when transactions are made.
How to stop money from disappearing: You might need to take away the debit card and checkbook to prevent your parent from making large withdrawals. Give your parent a prepaid debit card to limit the amount of cash your parent has access to.
Increased susceptibility to scams and fraud
As a result of dementia, your parent will be less likely to recognize the warning signs of scams and be more easily swayed by people who want to take advantage of him or her.
How to spot signs your parent has been scammed: Unusual activity in your parent’s bank account, new accounts or bills from unknown lenders and unnecessary repairs being made at your parent’s house are just a few signs that your parent is a scam victim. Keep reading for signs your parent is a victim of scams or fraud.
How to stop your parent from being scammed: There’s no surefire way to protect your parent. You can reduce the risk, though, that your parent becomes a victim by alerting your parent to scam red flags, monitoring your parent’s financial accounts, helping your parent carefully vet any financial professionals he works with and taking an active role in your parent’s finances.
[Keep Reading: How to Protect Your Aging Parents Against Scams and Fraud]