Dementia is a condition that affects the brain, making it harder for people to think clearly, remember things, and do everyday tasks. One of the most important everyday tasks is managing money. When someone has dementia, their ability to understand and handle money can change in many ways. This can make life much more difficult for both the person with dementia and their family or carers. Understanding how dementia affects money skills is important because it helps everyone involved know what to expect and how to help.
When a person is healthy, they can usually manage their money without much trouble. They can pay bills, check bank statements, make decisions about spending, and plan for the future. But as dementia starts to develop, these abilities can begin to fade. Even in the early stages, people might start to notice small changes. For example, they might forget to pay a bill, make a mistake when counting change, or have trouble remembering how much money they have in their account. These small mistakes can be early warning signs that something is wrong with their thinking skills [2].
As dementia gets worse, the problems with money become more serious. People might start to spend money in ways that do not make sense. They might give away large amounts of money to strangers, fall for scams, or buy things they do not need. Sometimes, they might not understand the value of money at all. For example, they might think that a ten dollar bill is worth a hundred dollars, or they might not understand that money is needed to buy things. This can lead to big financial problems for the person and their family [2].
One reason why people with dementia have trouble with money is because dementia affects the parts of the brain that are responsible for thinking, planning, and making decisions. These parts of the brain help people understand numbers, remember how much things cost, and make good choices about spending. When these areas are damaged by dementia, it becomes much harder to do these things. Studies have shown that people with mild cognitive impairment, which is often a sign of early dementia, already have trouble with tasks that require higher order thinking, like managing finances [6].
Another problem is that people with dementia might not realize that their money skills are getting worse. They might think they are still able to manage their money, even when they are making mistakes. This can make it hard for family members or carers to step in and help, because the person with dementia might not want to give up control over their money. Sometimes, they might even get upset or angry if someone tries to help them. This can create tension and stress in families, especially if there are disagreements about how money should be managed [6].
The effects of dementia on money skills are not the same for everyone. Some people might lose their ability to manage money quickly, while others might be able to do it for a longer time. The type of dementia, how far it has progressed, and the person’s overall health can all affect how much trouble they have with money. For example, someone with Alzheimer’s disease might have more problems with memory and planning, while someone with vascular dementia might have more trouble with attention and problem solving. Both types can make it hard to manage money, but in slightly different ways [6].
It is also important to think about the impact of financial hardship on people with dementia. People who are already struggling with money before they get dementia are more likely to have serious problems once the condition starts. They might not have enough money to pay for care, medicines, or other needs. This can make their health worse and make it harder for them to get the support they need. Research has shown that people living in poverty are more likely to develop dementia, and once they have it, they often face even greater financial challenges [1].
Carers of people with dementia also face financial strain. Looking after someone with dementia can be expensive, and much of the cost is paid by families. This can include things like paying for care, buying special equipment, or even giving up work to provide care. Studies have found that the total cost of dementia care over a lifetime can be nearly $400,000, and most of this cost is borne by families in the form of unpaid care and out-of-pocket expenses [3]. This can put a lot of pressure on carers, especially if they are already on a low income.
There are ways to help people with dementia manage their money better. One approach is to use simple tools and strategies, like setting up automatic payments for bills, using a calendar to keep track of expenses, or having a trusted person help with financial decisions. Some programs, like the Partner in Balance program, offer support to carers of people with dementia. These programs can help carers manage the stress and costs of care, and they can also provide practical advice on how to handle money matters [4].
Technology can also play a role in helping people with dementia manage their money. For example, online banking and mobile apps can make it easier to check account balances and pay bills. However, not all older adults are comfortable using technology, and some might find it confusing or intimidating. Research has shown that factors like digital literacy, confidence, and trust are important for older adults to use digital financial services. Programs that help older adults learn how to use technology can make a big difference in their ability to manage money safely [5].
It is also important to involve people with dementia in decisions about their money as much as possible. Even if they cannot manage everything on their own, they can still have a say in how their money is used. This can help them feel more in control and respected. Talking openly about money, making plans for the future, and seeking advice from professionals can all help families and carers make better decisions about money matters [1].
In some cases, legal steps might be needed to protect the financial interests of someone with dementia. This could include setting up a power of attorney, which allows a trusted person to make financial decisions on their behalf. It is important to do this while the person with dementia still has the ability to understand and agree to it. Waiting too long can make it harder to get the legal help that is needed [6].
Overall, dementia can have a big impact on a person’s ability to understand and manage money. This can lead to financial problems for both the person with dementia and their carers. Recognizing the early signs of money problems, using simple tools and strategies, seeking support from programs and professionals, and involving the person with dementia in decisions can all help make things easier. It is also important to think about the broader issues of financial hardship and the costs of care, and to work towards solutions that support everyone affected by dementia [1, 2, 3, 4, 5, 6].
[1] Alzheimer’s Society, PhD student Sarah Feltham-Chesshire
[2] All About Estates, The AARP BankSafe Dementia Hub
[3] Frontiers in Public Health, Caregiving-related strain among informal caregivers of older adults
[4] Taylor & Francis, Cost-consequence analysis of the Partner in Balance program
[5] Nature, FinTech and older adults
[6] PMC, Alzheimer’s Disease Clinical Trial Decision-Making Among Patients
