Mind Over Money: Early Signs of Cognitive Decline

It is normal to experience age-related declines in vision and hearing, speed of thinking, divided attention, occasional word-finding difficulties and misplacing items. So, at what point should you and your family become concerned about cognitive changes?


Mild cognitive impairment (MCI) occurs when cognitive difficulties exceed those of normal aging, but are not severe enough to prevent independent completion of complex daily tasks. Approximately 10-15 percent of patients with MCI progress to dementia each year, and MCI can affect some aspects of tasks such as financial management.


Dementia causes significantly greater cognitive problems than anticipated in normal aging; it affect independent completion of instrumental activities of daily living, such as driving, managing money and taking medications and then progresses to affect simple activities of personal care. Dementia can be caused by many factors; the most common is Alzheimer’s disease.


Early signs of cognitive decline which may not be part of normal aging include:

  • Memory loss affecting complex daily activities -forgetting purchases, recent events or paying bills late, repeatedly or not at all
  • Difficulty planning and organizing-problems estimating time frames for travel, planning and gathering materials for meals or projects
  • Difficulty with numbers, problem-solving or abstract reasoning-problems balancing the checkbook; uncharacteristic shopping or charitable donations
  • Impaired judgment-uncharacteristic or risky decision making
  • Changes in language-increasing difficulty explaining one’s thoughts or finding the right word; substituting inappropriate words
  • Disorientation-forgetting dates, getting lost while driving
  • Misplacing items in inappropriate places (wallet in garage, keys in freezer)
  • Changes in appearance-declines in hygiene, wearing dirty clothes, weight loss
  • Changes in mood and behavior-loss of motivation, new-onset mood swings such as anxiety or anger out of proportion for the issue at hand
  • Changes in personality-paranoia, social withdrawal or socially inappropriate behaviors


Financial Management

A decline in money management is often one of the earliest signs of incipient dementia. Independent financial management requires: basic monetary knowledge, such as identifying and counting money; conducting and remembering cash and credit/debit card transactions; understanding a bank statement and completing math calculations; paying bills accurately and on time; understanding financial concepts and assets; and maintaining judgment about financial activities to avoid financial loss.

Individuals and their families are encouraged to set up safeguards to prevent financial errors and abuse before they occur, such as:



  • Consult a qualified legal or financial adviser.


  • Identify a Durable Power of Attorney for financial matters.


  • Set up overdraft protection, automatic deposit or bill payment.


  • Set up joint banking or permission for a bank to notify a third party if bills are not paid.


  • Consider setting up a Living Trust prepared by a lawyer, which provides instructions on how assets are to be managed during a person’s lifetime and distributed after death.


If all else fails, consider seeking legal appointment of a “guardian of the estate.” If an individual is resistant to assistance, it may be helpful to consult his or her physician for advice. A diagnosis of MCI or dementia does not immediately indicate that one should stop handling finances. A neuropsychological evaluation of financial capacity may be helpful to determine how much assistance is needed with money management as well. It is important to remain involved in one’s finances, using safeguards to prevent errors for as long as possible, to minimize emotional distress related to loss of independence.

More information about financial planning in dementia can be found at:


As Featured in OutreachNC Magazine