Guide to managing finances after a brain injury

Brain injuries (include stroke) can cause cognitive issues that make managing finances difficult for recovering patients

Guide to managing finances after a brain injury

Brain injury is the leading cause of death and disability worldwide, according to the International Brain Injury Association. Because most brain injuries result in long-term symptoms such as difficulty with decision making and concentration, forgetfulness and issues with cognitive thinking, it can be hard for survivors to continue managing their own finances throughout the recovery process.

To make matters worse, strokes and other common brain injuries can cost patients hundreds of thousands of dollars in related medical costs throughout the course of the rest of their lives.

This often leaves financial planning and management in the hands of family and loved ones. During the recovery process, the last thing a family wants to worry about is a patient’s financial health, so we’ve compiled a guide on what financial difficulties you might expect and ways loved ones can help patients manage their money without taking away their independence.

Financial capacity after brain injury

Brain injuries are broken down into two categories: traumatic brain injuries and acquired brain injuries. Traumatic brain injuries result from an external force such as hitting your head during a car accident or in a fall. Acquired brain injuries occur at the cellular level, meaning the damage to the brain is caused internally. Strokes are one of the most common acquired brain injuries.

While the medical symptoms for these two categories can differ, both can lead to a lack of ability to effectively manage day-to-day financial decisions and tasks.

Cognitive issues commonly associated with brain injury

You might be wondering, “How do cognitive issues equate to an inability to perform necessary financial tasks?” Tasks such as paying bills, checking bank statements and balancing a checkbook might not be the first things that people associate with cognitive brain function, but these chores (as well as more complex financial tasks) all require a significant amount of cognitive thinking. 

Here are some of the common cognitive issues a brain injury patient might experience:

  • Attention and concentration problems
Balancing a checkbook or managing a budget takes time and concentration. 
  • Problems processing and understanding information
Those with severe brain injuries (especially those recovering from a stroke) can have difficulty with everyday money tasks such as counting change or buying things with cash at the store. 
  • Problems learning and remembering new information
Managing financies is all about constantly learning and adapting to your situation and personal budget needs. It can be hard for brain injury patients to remember specific changes to their financial plan or bill schedule. 
  • Difficulty with planning and organization
If you have multiple bills with different due dates, it can be hard to organize when which bills are due and how much the minimum payment is for each. Missed or late payments can result in massive damage to your credit score and overall financial health. 
  • Reasoning, problem-solving and judgment impairments
In the short term after a brain injury, dozens of snap decisions have to be made, from filing insurance claims to setting up payment methods for hospital bills. In the long-term, reasoning and judgement play a huge part in everyday buying decisions such as impulse control and investment strategies. 

A study published in the journal Rehabilitation Psychology examined the financial capacity of adults who experienced moderate to severe traumatic brain injuries. Researchers defined financial capacity as the ability to perform a broad set of simple and complex tasks, such as counting currency, making daily purchases, managing a checkbook, paying bills, making investment decisions and using financial judgment.

In this study, those who experienced a traumatic brain injury underperformed compared to the control group in both simple and complex financial tasks. This was a troubling finding considering patients may be expected to make decisions about health insurance policies and claims, disability benefits and general bill payment and budgeting in the aftermath of a brain injury.

Managing finances after brain injury  

If you are a friend or family member of someone who has experienced a traumatic brain injury, there are a many ways you can offer help with personal finances.

You can start by organizing all medical bills and insurance paperwork. You can also check to make sure that bills get paid so that there are no late fees or collections. They can authorize you to attach a note to the account regarding the special medical circumstances, and some lenders, utility companies and credit card issuers may waive any late fees or penalties applied in the weeks immediately after the brain injury.

If the brain injury is severe, you should consider getting a letter of authorization or power of attorney. A letter of authorization is a less formal document that gives you the power to perform a specific task or job listed in the letter. Power of attorney gives you the power to act as the agent of another person in all legal matters.

You’ll need this if you are going to manage medical and insurance decisions and financial matters. The patient may need help managing their affairs for years after the event, and power of attorney will give you the right to act as a legal agent until that right is revoked.

It might be helpful for recovering patients to consolidate high-interest credit card debts with a balance transfer card. That way, they’re only paying one credit card bill a month instead of having to juggle multiple accounts, balances and due dates. These types of cards aren’t ideal for everyone, but they can help streamline the bill paying process for a patient who insists on managing his own bills once he recovers.

Apps, tools and resources

For patients who want to take a more active role in managing their finances (or for loved ones who need help streamlining the process in order to effectively manage both the patient's and their own finances), there are many apps and tools available.

  • Mint: You can connect all of your bank accounts, credit card accounts and monthly bills together in one place. Mint reminds you when a bill is due, tracks your spending and gives advice for controlling your budget.
  • BillGuard: This app tracks your spending and protects you against fraudulent charges. You sync the app to your bank account, and it notifies you of every transaction. You then have to swipe right if you made the transaction or swipe left if you don’t recognize the transaction.
  • Prism: This app lets you sync all of your accounts so that you can view balances and bills in one place. You can pay bills directly from the app or schedule them for later. The app also sends reminders when bills are near their due dates as well as notifications when bills get paid.
  • Cozi: A color-coded scheduling app that allows family members to share and manage their schedules all in one location. This can be especially helpful when several caregivers are helping with medical appointments and grocery shopping.
  • Clarity Money: This app helps keep track of subscription services, helping users stay on track with monthly budgeting tips and tricks. Users also have access to a free VantageScore credit score by Experian.
  • Spendee: If you are a caregiver helping manage more than one person’s finances, this app is extremely helpful. It allows users to create shared wallets to manage expenses for a household budget.

Most credit card issuers and banks have credit monitoring tools, budgeting assistance and other helpful resources available via iPhone or Android apps.

The bottom line

The recovery process for a brain injury can be long and stressful. For many patients, the road to full recovery can take years and might be an ongoing struggle of the rest of their lives. Both in the immediate aftermath of a brain injury and throughout the recovery process, the last thing a patient should have to worry about is their financial stability.

Knowing what to expect after a brain injury and streamlining the financial management process can help both family members and patients ensure finances are taken care of post-injury.


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Updated: 10-17-2018