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Unpaid bills, lower credit scores and shrinking net worth: Years before people are diagnosed with dementia or other cognitive impairment, they often have difficulty managing money and start

suffering financially, according to several new studies. The findings indicate that faltering financial health can signal declining brain health, and they point to the importance of

protecting your finances, or those of your loved ones, from the impact of cognitive impairment. “We don’t want these losses to happen just at the time when people most need all their

financial resources to support themselves throughout their illness,” says Debra Whitman, AARP chief public policy officer. Analyzing credit score and Medicare data, Federal Reserve Bank of

New York researchers discovered that in the five years before a dementia diagnosis, people were more apt to miss bill payments. By one year before diagnosis, average credit card balances in

delinquency were more than 50 percent higher than delinquency balances measured six years before diagnosis. Mortgage balances in delinquency were 11 percent higher; credit scores declined.

“The pattern of delinquencies is striking, even years before people become aware of their diagnosis,” says Carole Roan Gresenz, a professor of public policy and health at Georgetown

University and lead author of the study. Not everyone in the early stages of cognitive impairment mismanages their money. But if a person does, the financial costs can be severe. A recent

study published in the medical journal _JAMA_ found that household wealth fell much faster over an eight-year period among those eventually diagnosed with dementia, compared with control

groups. “It can be difficult for people who don’t have any knowledge of their own decline to manage money, especially when no one else is there to help,” says the study’s lead author, Jing

Li, associate professor of health economics at the University of Washington. In an earlier study, Li and other researchers found that 7.4 million older adults with dementia or cognitive

impairment were managing their household finances on their own. PROTECT YOUR FINANCES Self-awareness can help minimize risk, a _Journal of Political Economy_ study found. Wealthier people in

the study who hadn’t had a severe memory loss, or who simply were aware of their memory issues, had smaller drops in net worth than did those who weren’t. “People are often unaware of their

cognitive decline and may be overconfident, which leads them to take financial risks,” says study coauthor Franco Peracchi, professor of econometrics emeritus at Tor Vergata University of

Rome. To help protect your finances, or those of someone close to you, consider these eight actions.