When a loved one begins to struggle with memory or decision-making, the signs aren’t always obvious at first. But one of the earliest indicators of cognitive decline can actually show up in their finances.

Subtle Financial Changes Can Be the First Red Flags

Researchers have found that years before someone is officially diagnosed with dementia, there may be small but noticeable changes in how they manage money. If your spouse, parent, or close friend lives alone, these signs might be even easier to miss—but they matter.



Watch for changes like:

• 📉 Missed bill payments or rising late fees
  
  
• 💳 Unusual credit card purchases or increasing debt
  
  
• 💸 Sudden withdrawals or “gifts” to unfamiliar people
  
  
• 📊 Strange investment decisions that don’t match their usual behavior
  
  
• 💼 Forgetting about retirement contributions or taking unexpected withdrawals
  
  

If someone who was once financially organized is now confused by basic transactions—or making unusual financial choices—it may be time to ask more questions.

Emotional & Financial Strain Often Go Hand in Hand

Cognitive decline doesn’t just affect memory. It impacts judgment, risk perception, and decision-making—especially around money. A person may become more impulsive, fall for scams more easily, or hide mistakes out of embarrassment.

These behaviors are often not intentional, and your loved one may still be very capable in other areas. That’s why it’s so important to gently and respectfully open up the conversation.

Consider asking:

• “I noticed a few things on your bank statement—can we look at them together?”
  
  
• “Have you been getting calls from people asking for money?”
  
  
• “Would you like help reviewing some of your recent financial decisions?”
  
  

When Care Needs Increase: Planning Ahead Matters

Dementia care—especially memory care communities—can cost $10,000 or more per month. If a loved one begins to decline and one spouse needs full-time care while the other stays at home, this creates a double financial challenge.

It’s common for families to feel overwhelmed and try to cover these costs by:

• Pulling money from retirement accounts
  
  
• Selling stocks or real estate under pressure
  
  
• Taking on personal loans or credit card debt
  
  

These choices can have major tax and financial consequences.

A Less Stressful Option: Home Equity as a Safety Net

For many seniors, their home is their largest financial asset. Instead of dipping into retirement savings or taking on new debt, it’s worth exploring if a reverse mortgage or home equity solution could help cover future care costs.

A reverse mortgage may allow you to:
✅ Access tax-free cash without selling the home
✅ Avoid monthly loan payments
✅ Stay in the home as long as you live there
✅ Reduce financial stress for the healthier spouse

Not every situation calls for this—but for the right person, it can be a lifeline that preserves dignity, security, and peace of mind.

Let’s Have the Conversation Before a Crisis

If you’ve noticed some early warning signs in your loved one, you’re not alone—and you don’t have to figure it out alone either. Speak with a trusted financial planner, elder care professional, or mortgage specialist who understands how to navigate these changes with compassion and care.

We’re here to support you with real options and a thoughtful approach.
It’s not about taking control—it’s about protecting what matters most.

Disclaimer:

Retirement In Reverse is a mortgage company dedicated to serving older adults, financial planners, and wealth managers with a strong focus on education and informed decision-making. While we strive to provide helpful information on a variety of topics, we are not experts in all areas. That’s why we collaborate with a trusted network of professionals—including attorneys, tax advisors, and financial planners—to help connect you with the right expert based on your individual needs. The information provided in this article is for educational and illustrative purposes only. Before making any financial, legal, or lifestyle changes, we strongly recommend consulting with a qualified professional who can review your personal situation. If you are considering Reverse Mortgage, call Ted Lange at 760-753-1568 to learn more.