Ageing comes with its fair share of pitfalls. The body doesn’t always do what it once could, but the memory may also be starting to fade. This may take slight forms of memory loss, but increasingly, for many Australians, it’s manifesting in the form of dementia – a disease that now affects 1 in 10 Australians over the age of 65, with a trend that is increasing.
Dementia and memory loss bring their own personal difficulties, but they can contribute to greater risk in terms of financial matters if the sufferer is unable to recall important financial information or make rational decisions affecting their finances. Self-control can gradually dwindle and bills can finish up being paid twice, or not at all.
Here are a few suggested actions to help make financial management much easier.
Set up automated payments. Bills can easily be overlooked but establishing automatic payments eliminates the risk of forgetfulness or overpaying, particularly with essentials such as electricity, phone and rates.
Check your will. When was this last updated? Evidence suggests that almost half of all Australians don’t have a valid will. No one wants to plan their impending death but writing down your wishes, both for yourself and your money, creates less uncertainty later.
Write things down. Do you have your information written and in a safe place? Passwords, medicare numbers, tax information and other forms of record keeping needs to be where both you and a trusted person can access if required.
Consider a power of attorney. If you are relying on others for help, then formalise it with a power of attorney. This will help the person understand their obligations and give them greater power to act on your behalf.
Simplify your finances. Diversifying can be a wise investment strategy but having your finances too far spread can be complicated at a time when you need things to be simple. Consider consolidating bank accounts and closing investments or credit cards, and repaying debt, that is no longer required. – should you have a SMSF it may be time to reconsider it.
Review your insurances. Your insurances provide you with a degree of protection and certainty moving forward. Make sure you review the personal, medical and life insurances you have in place and what best fits your needs.
Decide what age care you want to have. You may be some time away from needing greater help but expressing your wishes around aged care will be easier now than later.
Think twice about credit cards. Aside from your investments your daily spending will be one of your most vulnerable financial areas. Good judgement can often disappear and it’s important to protect yourself against spending decisions that might not be in your best interest. Consider replacing your credit card with a debit card and keeping a maximum level of money in the account it is linked to.
Many of these suggestions represent good planning regardless of your mental health. No matter how you may be feeling mentally now it’s important to plan for future developments. You may become vulnerable to your own memory loss or the predatory financial behaviour of others. Good planning and protection is the key to ensuring you reduce your risks in this area.
If necessary, you should consider getting professional advice. This will help you understand your options. Fear often comes from not understanding and simply having a good Advisor explain your situation will go a long way towards improving how you feel and what you can do.
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The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a Financial Advisor or other finance professional.