A recent study from Johns Hopkins University suggests that difficulties in managing finances may serve as an early indicator of dementia, potentially appearing up to six years before a clinical diagnosis. Researchers analyzed data from more than 81,000 older adults, linking health insurance claims with credit reports over a 20-year period. Their findings showed that missed bill payments, declining credit scores, and irregular financial behavior were not merely consequences of dementia but signs that the condition may be developing well in advance.

According to University of Michigan economist Joanne Hsu, the ability to manage money is among the first cognitive skills to decline. Tasks such as paying bills, calculating tips, or understanding bank statements require complex cooperation across multiple brain functions, making financial management a sensitive marker for early cognitive issues.

The pattern has been corroborated by another large-scale study involving nearly 2.5 million individuals over 17 years, which also found that deteriorating credit scores and increased payment delinquencies frequently precede dementia diagnoses by several years.

These findings underscore the connection between financial behavior and mental health, highlighting why older adults—whether diagnosed with dementia or not—are increasingly vulnerable to financial scams. It is estimated that one in five adults over 65 experience some form of financial exploitation, resulting in annual losses estimated between US$28 billion and US$48 billion. To put that into perspective, this figure eclipses the entire yearly revenue of Netflix, which stands at around US$34 billion.

A 2024 projection further estimates that undiagnosed dementia could cause as many as 600,000 missed payments over the next decade. These incidents often prompt late fees and penalties from financial institutions, which may overlook the underlying cause of the erratic financial behavior.

Beyond missed bills, individuals in the early stages of dementia may engage in riskier investments or make unusual charitable donations, actions that are harder for observers to attribute to cognitive decline. The subtlety of these changes complicates early detection, often leaving family members and service providers unaware.

Experts emphasize that financial management requires memory, attention, planning, impulse control, and the ability to handle multiple pieces of information simultaneously. When these faculties begin to deteriorate, individuals may dismiss the changes as simple forgetfulness, laziness, or disorganization, rather than signs of a serious underlying condition.

However, such research primarily aids those experiencing a cognitive decline from a previously stable baseline. For individuals who have historically exhibited inconsistent financial behavior, these warning signs may be less applicable.

The studies offer important insights into how financial data could potentially be used as an early screening tool for dementia, providing an opportunity for intervention before symptoms become more pronounced. Still, experts caution that these patterns are part of a complex puzzle and should be interpreted alongside broader clinical assessments.