Posts Tagged "money management"

First, Money Woes. 6 Years Later, Dementia

Gayle Blanton

Gayle Blanton, the blogger’s mother

My 85-year-old mother is on top of her bills. She pays several of them online, which is impressive enough, and she knows which bill is due when.

So, we should both take some comfort in the fact that she is not having difficulty managing her money, which is an early sign of dementia.

The connection between poor money management and declining cognitive capacity was established in research years ago. An obvious next question – when does this early warning system kick in? – is answered in The Journal of the American Medical Association.

The researchers followed more than 81,000 men on Medicare for more than a decade and linked their medical records to their Equifax credit reports. The men who would eventually be diagnosed with Alzheimer’s disease or dementia started missing the due dates on their bills about six years before the diagnosis.

There are many reasons for the gap between signs of trouble and an actual diagnosis. If family don’t detect a decline in cognitive ability, they won’t ask a doctor to administer a dementia test. Family might confuse early-stage dementia with memory loss, which is a natural part of aging. One financial manager said some of her clients try to hide that they’re having trouble handling their finances – or “do not want to admit the problem to themselves.”

If dementia goes undiagnosed, the financial problems get worse. A second finding in the study was that about 2½ years prior to a dementia diagnosis, retirees’ credit scores were much more likely to slip to subprime levels, or below 620 points. …Learn More

Students in class

How High School Finance Courses Fail

States with personal finance course requirementIn more than 30 states, completing a personal finance course is required for a high school degree.

The requirement started gaining traction around the country in 2005, despite the long-running debate about whether the courses even work.

A new study gets at whether high school instruction is effective by asking a fresh question: do the finance classes make people feel better about their situation – and feeling better about one’s finances is an indication things are, in fact, improving.

This departs from past studies focused on objective measures like credit scores and past-due loans.

The researchers find that high school courses have generally been a positive development: adults who grew up in states that require the courses do, in fact, feel better about their finances compared to people from states lacking a requirement.

But what’s interesting in this study is that a group of disadvantaged Americans feel worse off for having taken the courses: high school graduates who didn’t go on to college. Rather than helping them manage their financial challenges, the classes are only making things worse.

Before examining the reason for this, consider how the researchers measured the feeling of well-being. They used recent data from a series of questions asked by the FINRA Investor Education Foundation: Do you feel you have control over your money? Could you afford an unexpected expense? Do you have a sense of achieving your financial goals?

Most important, FINRA asked, do you have the financial “freedom to make choices that allow a person to enjoy life”? FINRA’s survey was conducted in 2018, but this question is relevant in the COVID-19 recession. Enjoying life is essentially the flip side of having financial stress, which is currently very high among low-income workers without college degrees.

The researchers argue that adults with no more than a high school diploma who’d taken the personal finance classes feel worse, because the classes delivered a “harsh dose of reality” that can “make economically vulnerable people more aware of their precarious financial situation.” …Learn More