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During waking hours she hides it beside her while she has her hand on it. She thinks everything she owns is in it (currently $7.00) and she doesn't understand she has money in the bank. Now that she's winning Bingo Bucks at assisted living, she has become even more obsessed to the point where she is belligerent and thinks people are trying to steal it. She appears to think the "Bucks" are real. It has become all-consuming. Help!

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This was helpful. I chuckled a bit at some of your answers... and then I thought of the item I rarely go without, as if it contains all my money and bank cards and treasured photos and the rest. I sleep with it under my pillow or I fall asleep with it in my hand. It's on my lap at the dinner table. It even goes to the bathroom with me...

...and then I have a good chuckle at myself.

If it's not hurting her, let her have it. Easier than being able to reason with her.
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My mother was like this with her eyeglasses. Perhaps you could create a duplicate purse.
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A great way to keep both little kids and the elderly happy is the Target $1 bin just inside the store. For a buck you can get something cute to put in mom’s purse for her to find. Or keep a toddler occupied and bypass the more expensive stuff! Target $1 bin has saved me many times!
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What's the harm. Let her keep it by her side and take it wherever she goes, if that will
make her happy.
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Unless it is a safety issue..can not hold onto a walker or cane while clutching her purse I would not worry about this "quirk"
Look at it this way, she is holding on to her purse not stealing someone else's
She is not wandering away from the facility, calling you every day asking to be taken home, getting violent or any number of other common problems that some people develop.
As to the BINGO bucks being "real" or not...are they used to play more games? can they be used in a facility shop? if so they are just as "real" as the cash that I have in my wallet.
All our lives we put such an emphasis on earning money. Fist to buy something when you are a kid, babysitting jobs to by "records, movie tickets, go out with friends then later as an adult to buy a car, a house, to put the kids through school. It is no wonder that she is "obsessed" with money it has had a deep meaning all our lives. Give her a real thrill..if you can make copies of the BINGO money and give her more!!! She will be the richest lady there. (Obviously you can't do this if the BINGO bucks are used in the facility for games, or purchases in any shop that would counterfeiting!)
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A long time ago, I went to a presentation called "Stop Struggling with Your Aging Parent". One of the best ideas I learned was that if what your elderly parent is doing is not harmful to others and not dangerous for themselves, let them do it. The example they gave was an elderly man who wanted to wear his hat all the time, even when he slept. This frustrated his daughter very much. The counselor explained that wearing his hat is not dangerous to anyone, so let him have it. I say let your mom have her purse. I like the idea of attaching a strap to it so that she can wear it cross-body, leaving her hands free. Id she will accept a new purse, maybe a light-weight one.
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There are much worse things to be obsessed about - humour her & let her keep it - once in a while give her a damp cloth for her to do clean on it & hopefully get rid of used/dirty stuff - give her stuff or it like those kleenex small packs, chapstick, etc

If she uses it all the time try to get a fabric softener sheet [even a used one] into it as then it will smell nicer for her & bugs will stay away - maybe first time do a similar thing to your bag at the table along with her with a small bag for garbage but remember to put some things in your purse to throw out so she joins in the programme
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You might try taking baby steps. Try to get her to put her purse near her on a table. Then reinforce it by saying, your purse is there and hasn't disappeared. Work on this concept with her several times a day. She may relax a bit. You can also take the bucks and put them in a clear baggie add a handle and let her hold that instead. Then proceed to wean her off carrying the bag buy putting it in her purse and setting it on a table near her. It's a slow process but I hope this helps. You can also substitute her purse with something that means a lot to her.
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People become aware of having less and less control of their lives and belongings and this is a common behavior. Let her keep the purse with her unless it is a health or safety concern. The peace of mind it brings her is more important. Remember: Don't sweat the small stuff !!!
Best of luck.
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Veronica I know only too well how close I am to LOL Land.

Just recently, I have noticed a subtle change in my routine. I get dressed, I put on any make up I can be bothered with, I put on my scent, I put in my earrings... and as I stand up, I whip a Kleenex from the box and tuck into my sleeve.

Doomed!
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Some medicines make the person "obsessed" with things.

You have to learn to "pick your battles" - let her sleep with her purse. Maybe even go further and tell her you admire her for protecting her "valuables."

Positive is always better than negative.
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OMG! I thought my mom was the only one that obsessed about her purse!

My mom moved in with my husband and I back in December after she fell a few times and it was apparent she could no longer live on her own. She was in rehab for a while, but Medicare released her after 17 days.

I put away all her personal things, including her purse, while in rehab. She asked about it often, and I let her know I had to keep it safe.  But I could tell it bothered her and she was fretting about it.  

Once she was home, it took her about a month, but one day she very agressively asked where her purse was. I told her I had put it away. She demanded that I give it to her NOW! I gave it to her and she kept going through it over and over and over. She kept it in her room and at least once an hour she would go to her room and look through it. I asked her if she was looking for something and she would say no.

I wasn’t sure if this was an age- related behavior or she was a little nuts (other behavior had me thinking this may be the case) or her dementia. May be a combination of these.
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Dear One, It is a comforting and soothing item much like the teddy or blanket we had as children and not uncommon. When my mother is agitated, her old purse with an expired driver’s license inside is her go to comfort and connection. It doesn’t harm her or anyone. Let her have it until she no longer wants it. Much love.
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My mom takes all the dollar bills out and recounts them. She plays with the money to the point where she tore a twenty in two pieces so I had to tape it. When she goes out, she hides it under the couch ( then can't remember where she put it) It hangs on her bed every night. Really is a security thing.
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97yroldmom - that is actually happening here. There are two women going through our neighborhood claiming to be homeowners looking for gardening tips. They find a gullible home gardener working outside. They ask to see the backyard. While the gardener shows them the back, a third person goes into the house from the front.
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Mom had a death-grip on her purse as well & a few times I found it in bed with her. What did she have in it? Tissues. Nothing else. My sister & would laugh about a purse snatcher’s reaction if it ever was stolen.

My favorite expression when faced with situations like this became “it’s not a first-world problem, let it go”.
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My mom lived in a rural area. She heard a story through her friends that there was a vacuum cleaner sales team in the area. Supposedly they would go into a home where one would demonstrate the vacuum while the other pilfered the homeowners purse. (I’m not sure this actually happened).
She solved this problem. Should the team show up at her home, she had a “decoy” purse near her chair for the thieves. Being a frugal person who didn’t really want to give up anything, it didn’t really have much in it. The tissues. A pair of ankle hose. A comb. A church bulletin. It felt empty when picked up.
Her actual purse was hidden away in her bedroom. The decoy purse stayed in place so long that it was dusted along with other things in her sitting room.
MIL carried one of the big multi pocketed bags that was full of any and everything she might need. Very heavy. She would change her bag often to match her outfits. When she died a matching bag went into her coffin with many of the necessities packed inside.
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CM in old lady land where I currently reside the purse is just like a small child's favorite
soft stuffed animal or "blankie" One daughter had a tatered teddy the other a mouse and my son much loved panda. I had a teddy and a donkey called " Docky"
To the elderly they are frequently their only procession that they can retain control over.
Let her keep her bag. Maybe empty the used toilet paper from time to time but it is her security and so valuable that someone is sure to want to steal it.
No in case anyone is wondering I don't store used toilet tissue but i do keep my purse handy becase that way i have my check book to pay bills , my book with phone #s and appointment book to write my many appointments.
My walker has a couple of canvas bags on it plus I have rigged up a wire basket so I can transport my meals and drinks. The basket is also useful for getting groceries into the house and transporting laundry.
Until you enter old lady land you do not understand why old ladies have certain behaviors. Hubby never moves without his computer and phone. you can usually find a milky way in his car.
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Do you all remember Sophia on the Golden Girls? Carrying her purse everywhere was a running gag. I agree with the other posters about the tummy bag. If she still won’t relinquish the purse, let her keep it. I learned a long time ago when raising kids to “pick my battles”. As to Bingo Bucks, the residents of the nursing home where my parents reside give out real Bucks. They get a dollar for regular Bingo and $5 for a blackout. Bingo is serious business in the South. These senior citizens wanted nothing to do with fake money!
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Allow Mom to have her purse.
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I think the tummy bag would be great. I had to laugh at your initial comment, b/c my mother walks with a walker and has all her "stuff" hanging off of it. She looks like a bag lady, even tho she's usually pretty groomed. She carries her purse (it weighs more than she can carry!) a satchel thing, slung over one of the walker's arms, and a couple of plastic bags "just in case" (of what??) PLUS somebody made her a walker bag which attaches to the front of the walker. Watching her pack up for a journey is crazy!

And yes, that purses, bags and "walker holder" are jam packed with damp tissues, wadded newspaper clippings, gum, candy, TUMS, I never know what I might find.

I think a lot of it is the innate "hoarder" in her, which nobody can "solve", but also a generational thing. The enormous purses my grandmothers carried---endless supplies of stuff. Probably 90% tissues!!

And yes, mother worries herself senseless that someone is going to take her identity. WHY anyone would want the identity of an 88 yo woman with bad credit is beyond me.
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Same with my mother although she hasn't slept with her purse, she holds on to it like it's a life saver.

She constantly asks about her money, always thinks her money is at risk of being stolen. She sometimes forgets that her SS money is deposited directly into her bank account. She thinks it gets delivered by mail and someone stole it.

When her old purse was so tattered, we had a tough time finding her a new one that she liked. We took her shopping for a new one, she would choose one she liked, when we got home she changed her mind. She did that 3 times before she finally agreed to keep the last one. So frustrating.
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I wouldn't worry about it
In fact having a purse with fake money helped mom greatly during her first year in memory care - I had swapped out her normal purse for a smaller nylon cross body bag

She would spend hours going through it - counting her money and eating the little treats I would put in it - life savers and peppermint candies, a pack of cookies and the like
It was large enough to hold a readers digest

She too would sleep with it under her covers
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I think purse-clutching is pretty common throughout Little Old Lady Land, isn't it? Like tissues in the sleeves and covering everything in clingfilm and going "oof" when you get up.

I think the tummy bag is a great idea; but if she won't hear of swapping her established purse maybe you could feed a belt through it and keep it close to her that way?

Also... how long has she had this particular model? Because before you throw it out, make sure it doesn't in fact contain her eternity ring inside a tissue, inside said cling film, inside a folded brown envelope, deep inside the zipped compartment.
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I checked your profile, thinking your mom must have dementia, but it said age related decline.

This is a very common behavior in dementia. My mom also had a death grip on her purse. She ate with it in her lap. She slept with it under the covers. It had a long strap and she'd wear it across her body. I couldn't move it without her freaking out. There was nothing in it but a comb, lipstick and a mirror but you'd think she had $1000. inside.
She was like that until she progressed to the end of stage 6 Alzheimer's.
She seems to have "forgotten" about it and sleeps a lot now.

Have you seen other signs that her thinking and behavior is off?
Has she had an appointment with her doctor recently?

With dementia there is no changing their behavior and they can't understand that their behavior is unusual. Dementia victims can't process information and act on it.

I'd get her checked out by her doctor.
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Get her a tummy bag. That way it can be with her all the time.
Amazon do a great one - 

amazon.co.uk/Unisex-Travel-Passport-Wallet-Festival/dp/B06WLN1Y96/ref=sr_1_5?ie=UTF8&qid=1522076125&sr=8-5&keywords=purse+bum+bag
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