New York CNN  —  Financial files in disarray. Late payments and last-warning service-cutoff notices. Multiple daily bank withdrawals. Out-of-character purchases. When a family member who has been fairly responsible with money all their lives becomes careless with their finances, it may be one sign of as-yet-undiagnosed dementia. Researchers at the New York Federal Reserve who analyzed both US credit reporting and Medicare data found that in the five years before a dementia diagnosis, a person’s average credit scores may start to weaken and their payment delinquencies rise. “The harmful financial effects of undiagnosed memory disorders exacerbate the already substantial financial pressure households face upon diagnosis,” the researchers wrote. “Beyond susceptibility to payment delinquency, early stage [Alzheimer’s disease and related disorders] may affect new account openings and debt accumulation, credit utilization, and/or credit mix.” Their findings echo the results of a 2020 study from the Johns Hopkins Bloomberg School of Public Health. ‘Methodical’ military spouse’s record-keeping deteriorates Marcey Tidwell, who lives in Bloomington, Indiana, said those findings are “not remotely shocking.” Tidwell’s mother was diagnosed with a form of dementia in 2020 and has been living with her daughter ever since. The Raytheon Technologies, recently renamed RTX Corporation, headquarters building is seen at dusk on January 20, 2024, in Arlington, VA. J. David Ake/Getty Images Related article Class action suit alleges Raytheon discriminates against older job seekers Tidwell said that for most of her life, her mother was an “outrageously methodical human being” who kept the bills paid and the family records organized across many moves as her husband pursued a career in the military. After going through her mother’s papers this year, Tidwell surmises that her mother’s memory started faltering around 2015, because from that point forward her record-keeping became “less than pristine.” For example, Tidwell said, her mom used to keep an immaculate record of checks written and deposits and withdrawals made in her checkbook register. But that register became a mess. “There was a bunch of stuff scratched out and she was obsessively adding and re-adding — she knew things weren’t all they could be. Later on, I saw that she took out large amounts of her savings, more than she needed for groceries.” Former finance executive accrues piles of unpaid bills, finances new car he didn’t need Karen Lemay, who lives in Ottawa, Canada, knew something was really wrong with her father in 2022 when she saw on his desk piles of late-payment notices and final-notification warnings from service providers and insurers. shapecharge/E+/Getty Images Related article You’ve retired. Can you get a mortgage — and should you? Her father was a former finance executive who “was very conservative with his money, very smart about it and never reckless with it,” she said. And he had strongly impressed upon his daughter the importance of paying off her credit card in full every month to avoid interest. Yet Lemay discovered he owed $50,000 in charges, interest and late payment fees on a Visa card. He also financed the purchase of a new car he didn’t need, just months before police took away his driver’s license. Normally, he would only buy high-end used cars with cash, she said. What’s more, his daughter noted, he failed to pay his 2021 taxes. So he ended up owing the government roughly $20,000, the bulk of which was for late payment and underpayment penalties. “I spoke to him about some of his balances and he refused to believe he hadn’t paid them,” Lemay said. Two parents with dementia, one daughter’s efforts to reduce financial worry Jayne Sibley, who lives in the United Kingdom, knows the pain and stress of dealing with the financial behaviors that can signal dementia. Her father and mother were both diagnosed with different forms of it. Her father moved into a nursing home years ago, but her now-deceased mother remained in her own home, albeit with live-in care. “The most challenging thing we faced was managing mum’s everyday money as her condition progressed. She would overspend on things she didn’t need or want. Random items, cleaning equipment, luxury food. She also fell victim to scams over the phone — a fake insurance policy, those sorts of things,” Sibley said. Her mother also would take money out of the cash machine two to three times a day and give it to anyone who asked. Acutely aware of how high long-term care costs were, given her father’s situation, Sibley said she worried that her mother would run through the money that would be needed for her own care. While her mother’s condition made her vulnerable with money, she initially was still able to walk and shop and go to yoga on her own. In other words, she was able to maintain a lot of her autonomy and social ties. To try to stem the money outflow, Sibley and her brother tried doling out a week’s worth of cash for their mother “but she’d spend it all in one go,” she said. Ditto when they tried divvying the cash up into daily envelopes. Eventually, they took away her cash card. But, soon after, her condition worsened, Sibley said. “She wasn’t able to maintain her familiar routines and social connections. That’s when we realized there has to be a better way.” With her husband, she founded Sibstar, which offers a debit card in the UK that can be used by a person with dementia to maintain some sense of financial autonomy and social engagement. When needed, family caregivers can monitor their debit transactions via an app. As a person’s condition worsens, the caregiver can set limits on how much money can be spent on any given day or week, and where the card can be used (eg, at cash machines, online or at the grocery store). Early planning lessens some stress While there are few dementia-specific financial tools to reduce the odds that someone squanders their own hard-earned money, there are steps you can take to make it easier to assume control over another person’s finances when they become incapacitated. In 2008, a year after her father died without a will and a dozen years before her mother was diagnosed with dementia, Tidwell said she and her siblings took their mother to a lawyer to make sure she had a will, named her medical proxy and named the person to whom she would give power of attorney to handle her financial affairs should the need arise. That made it easier for Tidwell, among other things, to get online access in 2018 to her mother’s bank account to make sure nothing was amiss. By 2020, she had automated her mother’s bill paying online. “The time to make plans is you need to. It’s hard to overstate what a gift that trip to the lawyer in 2008 was to ‘future me,’” said Tidwell, who fully manages her mother’s finances now that her condition has worsened considerably. Since dementia can worsen over time and because someone in the initial stages may not recognize they are more vulnerable to financial errors and scams, the US National Institute on Aging recommends that a family take steps early on to alleviate those concerns, such as setting up automated bill payments for the person with dementia. Of course, no amount of advanced financial planning can alleviate the heartbreak of watching a loved one with dementia decline. “I prepared as best as I could, but it’s still hard,” Tidwell said. That’s why she advises anyone potentially facing a similar situation to, in her words, “make the easy part easy.”