The WALLET Study: Financial Decision Making and Key Financial Behaviors Associated with Excess Spending

ABSTRACT

Objectives

The Wealth Accumulation and Losses in Later life Early Cognitive Transitions (WALLET) study data was used to examine correlates with excess spending in older adults who do and do not have early memory loss.

Methods

The WALLET study collected detailed financial information from participants’ primary checking account statements (n = 150). Information on participant sociodemographic, health, and disability status, memory functioning, financial decision-making, and financial literacy was also collected. Participants either had no memory problems or early memory loss. Bivariate and multiple regression analyses were conducted.

Results

The early memory loss group had significantly higher excess spending than those with no memory loss. Financial decision-making and higher-risk financial behaviors were also linked to higher excess spending. Early memory loss was no longer statistically significant after accounting for financial stressors and resources.

Conclusions

The multidimensional nature of financial capacity assessment has long been known. The WALLET study data is unique, however, in that it demonstrates the links between excess spending with decision-making, early memory loss, and a set of specific financial behaviors.

Clinical Implications

Real-world assessments of financial management and financial decision-making yield important information about how older adults are managing money and making key financial decisions. Checking account reviews can be used to determine excess spending.

Keywords:

• Financial capacity
• financial decision-making
• early memory loss

Disclosure statement

Peter Lichtenberg Consultancy, LLC was created to maximize the use of financial decision-making and vulnerability tools.

Data availability statement

Data is available from the author currently while we work to establish an archived data set with NACDA at the University of Michigan

Supplementary Material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/07317115.2024.2348049

Additional information

Funding

This work was supported by the National Institutes of Health P30 AG015281, Michigan Center for Urban African American Aging Research; National Institutes of Health Michigan Alzheimer’s Center Core grant #P30AG072931 and the National Institutes of Health R21AG067405.