Changes in Financial Decision-Making Can Be the First Sign of Cognitive Decline
The Brain’s Financial Crisis
A 2024 study from the Federal Reserve Bank of New York is the latest alarm bell that missed credit card and mortgage payments can precede a dementia diagnosis by years.
Researchers analyzed data from 2.4 million older adults between 2000 and 2017, linking Medicare claims with Equifax credit report histories. About 478,000 of these individuals were later diagnosed with Alzheimer's disease or related dementias.
Here's what they found:
Financial problems start years before diagnosis.
Credit scores begin to fall and late payments start showing up more than five years before dementia is clinically recognized. Specifically, credit card delinquency increases were observed five years prior to diagnosis, while mortgage delinquency appeared three years before.
By the point of diagnosis, people were over 34% more likely to miss credit card payments and 17% more likely to miss mortgage payments compared to earlier baseline years.
The authors describe "disease-related inattention and decision difficulties"—missed due dates, confused accounts, duplicated payments. The financial decline mirrors the quarter-by-quarter cognitive decline these individuals are experiencing.
Translation: Cognitive decline can show up early in credit scores and bank statements.
Why Finances Fail First
Financial management depends on cognitive skills—many of which decline early in Alzheimer's disease and related dementias.
1. Executive Function
Planning, sequencing, attention, inhibition, and problem-solving—the capacities required to juggle bills, budgets, and deadlines—often show early decline.
2. Prospective Memory
Remembering to do something in the future—pay the electric bill next Tuesday, transfer funds before the autopay hits.
Prospective memory failures are among the most sensitive early markers of decline.
3. Numeracy
Even simple math—calculating interest, comparing prices, checking balances—relies on parietal and frontal brain networks disrupted by early pathological changes.
4. Vulnerability to Exploitation
Subtle cognitive decline—even before mild cognitive impairment is detectable—can result in impaired financial decision-making and increased vulnerability to scams.
5. Increased Altruism and Generosity
Here's a subtle sign that doesn’t seem alarming on the surface: A person who has always been financially conservative suddenly becomes unusually generous.
Research from USC and Bar-Ilan University found that increased financial altruism—giving away more money to anonymous others in experimental tasks—was associated with poorer performance on cognitive tests sensitive to early Alzheimer's disease, including word learning, story recall, and category fluency.
While deliberate generosity is certainly not a negative trait, research suggests that sudden or increased altruistic behaviors may be associated with declining cognitive function in some contexts.
The mechanism appears related to impaired judgment and reduced ability to assess risk and future consequences. The same frontal-executive systems that help us evaluate financial trade-offs and protect our interests are the ones that show early changes in dementia.
Families can interpret this as "Mom's just being nice" or "Dad's finally learning to enjoy his money."
But when generosity represents a significant change from baseline behavior, it may be a signal of cognitive decline.
What the Brain Reveals
In a cohort of 97 cognitively normal adults, researchers found that thinner entorhinal cortex—a structure affected early in Alzheimer's—was linked to greater self-reported vulnerability to financial exploitation (Fenton et al., Cerebral Cortex, 2024).
It's correlational, not diagnostic—but it hints at a neural marker for early financial risk.
In one of my early studies—MRI Volume of the Medial Frontal Cortex Predicts Financial Capacity in Mild Alzheimer's Disease (Brain Imaging and Behavior, 2013)—we found that atrophy in the medial frontal cortex, a hub for attention, calculation, and decision-making, directly predicted poorer financial capacity.
That work, later highlighted by the NIA, helped me discover and understand this:
Financial decision-making could be an early marker of neurodegeneration.
What We Can Do
1. Detect Early
Monitor real-world financial data—credit scores, bill-payment history, online banking patterns, and changes in giving behavior—just as we monitor blood pressure.
2. Plan Legally and Financially While Capacity Intact
Power of attorney, trusts, wills, financial protections, advance directives—complete them before decline.
3. Evaluate Financial Capacity
Financial capacity screening is important, not just screening for cognition. Review bill-paying habits, credit patterns, changes in charitable giving or financial behavior, and transaction histories to identify early warning signs.
Because the earlier we see decline, the more autonomy and dignity we can preserve.
4. Finances Are Personal, So Are The Data
Accessing financial information is sensitive and requires appropriate privacy protections, explicit consent, and security measures that prevent the very exploitation we're trying to detect.
The Bottom Line
Financial errors often precede cognitive diagnosis by years.
Specific brain regions—like the entorhinal and medial frontal cortex—predict financial decline.
Vulnerability to scams tracks with early Alzheimer's-related brain changes.
Increased financial altruism could be a sign of cognitive changes.
If you notice these changes—in yourself or someone you love—don't ignore them. They could be signals from the brain that it's time to pay attention.
References
Gresenz CR, et al. The Financial Consequences of Undiagnosed Memory Disorders. Federal Reserve Bank of New York Staff Reports. 2024;(1106). doi:10.59576/sr.1106
National Institute on Aging. Difficulty Managing Bills May Signal Early Dementia. Published January 16, 2025. Accessed November 12, 2025.
Stoeckel LE, et al. MRI Volume of the Medial Frontal Cortex Predicts Financial Capacity in Patients with Mild Alzheimer's Disease. Brain Imaging Behav. 2013;7(3):282-292. doi:10.1007/s11682-013-9226-3
Fenton L, et al. Lower Entorhinal Cortex Thickness Is Associated with Greater Financial Exploitation Vulnerability in Cognitively Unimpaired Older Adults. Cereb Cortex. 2024;34(9):bhae360. doi:10.1093/cercor/bhae360
Weissberger GH, et al. Increased Financial Altruism is Associated with Alzheimer's Disease Neurocognitive Profile in Older Adults. J Alzheimers Dis. 2022;88(3):995-1005. doi:10.3233/JAD-220187
National Institute on Aging. Increased Financial Generosity Linked to Lower Cognition and May Be an Early Indicator of Alzheimer's Disease. Published June 2022. Accessed November 12, 2025.
National Institute on Aging. Brain Scans Offer Insights into Loss of Money Skills. Accessed November 12, 2025.
Ho EH, et al. A Scoping Review of Financial Decision-Making Measures in Midlife and Beyond: Results from the ARMCADA Study. Front Psychol. 2025;16:1540508. doi:10.3389/fpsyg.2025.1540508
