Tejal Somvanshi
Growing older can make it harder to handle money and spot scams. A new study shows why this happens and how to stay safe.
Scientists at Binghamton University looked at how the brain handles money tasks in people aged 50 to 74. They found some interesting results about how we calculate in our minds.
Our brain uses two different parts for math. One part helps us remember basic math facts, like knowing 3 plus 3 equals 6. The other part works harder when we need to figure out new math problems.
“When people are doing the calculation, they’re more likely to get it wrong. If you’ve memorized it, you’ve memorized the right answer,” says Professor Ian McDonough, who led the study. “You’re faster, more efficient and more accurate when you have those verbal representations.”
As we get older, parts of our brain naturally get smaller. This means older adults often can’t rely on memory for math anymore. Instead, they have to work out each problem, which leads to more mistakes with money.
The good news? Two things help protect money skills: having experience with money matters and learning about finance early in life. The study also found that people who are good with words often handle money better.
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What can families do to help? Watch for signs of cognitive decline that could affect money decisions. Simple tools like automatic bill payments can help. Giving a trusted family member power of attorney for financial decisions is also a protective option.
“Managing finances is so important to maintaining independence later in life,” McDonough explains. “We need to have interventions that can strengthen the brain and help keep people healthy when managing their finances.”
Keeping up math skills learned in school may help maintain good financial management throughout life. Financial education and brain-strengthening activities could also make a difference in protecting seniors’ money skills.
The research shows we need better ways to teach money skills and support older adults with their finances. This helps them stay independent while protecting their savings
