Subjective Cognitive Decline and Excessive Spending in WALLET study participants

TL;DR

Older adults who believe their memory loss affects financial decisions are more likely to overspend and be vulnerable to financial exploitation.

Contribution

This study introduces a new 3-point scale to assess subjective cognitive decline's impact on financial decision-making.

Findings

Excessive spending was significantly more common in those who reported memory loss affecting financial decisions.

Participants who reported cognitive impact had higher financial exploitation vulnerability scores.

The association remained significant even after removing cognition-related items from the vulnerability score.

Abstract

Older adults experiencing cognitive decline are at an increased risk of financial vulnerability, yet self-awareness of this relationship remains unclear. This study examines the association between self-reported cognitive decline and excessive spending, exploring whether individuals who perceive memory loss recognize its financial impact. Data were drawn from a sample of 83 older adults in the WALLET study who shared 12 months of their checking account statements (M = 73.54, SD = 8.05), who were experiencing early memory loss. Twenty-five participants reported that memory loss was impacting their financial decision making and 58 said memory loss had no impact on their financial decision-making. Excessive spending was significantly more prevalent in those who reported that memory loss was impacting their financial decision-making, X² = 9.285, p < .01, d = .34. The group reporting that memory loss impacted financial decision-making also had significantly higher financial exploitation vulnerability scores (FEVS) than those whose memory decline was not reported to impact financial decision making, ( t = -2.609, p < .05, d = -.55). This pattern remained even excluding the cognition-related FEVS item, t = -2.087, p < .05, d = -.52. Age and education were not significantly different between groups.The results suggest that awareness of how early memory loss impacts financial decision-making might be a key factor in risk of excessive spending and financial exploitation vulnerability. Future research will examine the utility of a 3-point scale Subjective Cognitive Decline-Financial measure (i.e. no cognitive decline, cognitive decline only, cognitive decline impacting financial decision making).