(WOMENSENEWS)--Nancy Solomon recalls vividly the day she sat at her desk and thought about her credit-card balance of $25,000. She lined up all of her credit cards, dialed each card's toll-free service number and canceled all but one. She is keeping that one card for emergencies, and she vows each day to keep it out of her wallet.
"I am addicted," she confessed out loud for the first time in an interview. "I belong to a generation of women who were told that someone--presumably a man--was going to take care of us."
Solomon knows now that was "magical thinking." As far as holiday shopping and spending this year, here's what she plans to do: Pay cash and avoid any temptations to overspend.
"I am not being as flamboyant as in the past in buying presents for my family. I'm being very careful, and if I cannot pay for it in cash, I'm not buying it," said Solomon, who lives in Chicago.
Solomon, who is a freelance marketer, now has as her primary client the Web-based financial firm MyFinancialAdvice.com in Boulder, Colo. She helped the company write a business plan and was given a trial run of their financial service for research. The company charges fees for services a la carte such as financial advice, household budgeting and savings plans.
Solomon and women in similar positions can find the holidays filled with messages to spend money to satisfy one's family, spouse, friends and children.
"Women bear a disproportionate share of the responsibility for making the holidays a success for their families," said B.J. Gallagher, the Los Angeles-based author of 2002's "Everything I Need to Know I Learned from Other Women."
Making holidays successful means making sure everyone is happy, and psychiatrists say it's easy for anyone responsible for family happiness to go the route of shopping and spending. Research indicates that women control 80 percent of household spending, a $3.28 trillion market.
"We get bombarded with media information that the path to happiness is through having objects, and that the more precious the object, the happier it will make you feel," said Scott Haltzman, a psychiatrist in Barrington, R.I. who is also a marriage counselor and author of "The Secrets of Happily Married Men: Eight Ways to Win Your Wife's Heart Forever," to be published in January 2006.
He says that efforts at buying love easily backfire because spending money and acquiring debt can increase family stress and conflicts.
Women Concerned About Holiday Debt
Women who carry credit card debt had average outstanding balances of $2,300, according to survey research conducted in November by the Washington-based Consumer Federation of America, one of many organizations that offers resources on the Web. About one-quarter of women surveyed said they were concerned about being able to pay off credit-card balances as a result of their holiday spending.
The cues to shop in December can easily cause or deepen women's debt burden because so many women lack a cushion of on-hand, emergency savings. A nationwide survey in April conducted by Visa USA and the federation found that 42 percent of women who responded had less than $500 in emergency savings and 55 percent of women age 25 to 34 did not maintain an emergency savings account of at least $500.
The savings discussed in the survey omit long-term accounts such as retirement funds, but rather involve money women have set aside for emergencies. Of women's unexpected expenses, 68 percent involved health-care emergencies and car breakdowns, according to the survey.
A long-recognized rule of thumb is that when a person allows more than 20 percent of his or her take-home pay to be committed to credit-card payments, he or she is approaching a danger zone, according to Catherine Williams, vice president, financial literacy, for Money Management International, a Houston-based credit-counseling service.
Emotions at Core of Spending
Doris Jeanette, a psychologist in Philadelphia who founded the Center for the New Psychology, said deep emotions are at the core of over-spending.
"Are you trying to feel good by doing it, or are you trying to run away from what's going on in your relationships or your relationship with yourself?" Jeanette said. "It's a basic self-esteem issue."
Nancy Solomon's decision to reckon with her debt and over-spending came after she moved to Chicago from Denver in September.
She had always lived on the edge and spent more than she could safely afford. Yet even she was startled that the condo improvements she made in order to sell her home in Denver along with the expense of creating a new home sent her credit card debt skyrocketing. The $15,000 of "out-of-control" spending debt she had long carried grew quickly by another $10,000.
She knew that she faced a much higher cost of living in Chicago and that the holidays were fast approaching.
"I had to be really clear about how much money I needed so I wouldn't have to live on a heating grate in Chicago," she said, laughing at the new reality of her cash-only lifestyle. Solomon thinks of her 8-month-old twin grandsons to help stay on track. She wants to be able to spend more time with them, but only after she works to pay off her debts.
Spending Habits Stalled Savings
Despite her resolve, her former spending habits continue to affect her. Solomon, who is now 66, says she will never be able to retire and was not able to begin saving for retirement until six years ago.
Deborah Davis, a 45-year-old recruiter of creative talent from Boulder, recalled her moment of epiphany 21 years ago, when her frantic outburst about being unable to pay for holiday gifts at Christmas prompted her father to give her permission to opt out of the family gift-giving tradition.
At the time, Davis was working nearly full-time and going to school full-time. Today, she continues to stay out of most holiday gift-giving by notifying friends and family that she will refrain from the commercial aspects of Christmas. She invites them to do the same.
"In the years since I've been practicing this, I see the madness. I'm so calm. I'm not in the middle of all that stress," she said. Davis hosts a brunch for her employees and their families and she makes a donation in her clients' names to a good cause.
This year, it will be relief efforts for the survivors of Hurricane Katrina.
Sandra Guy, a 22-year veteran journalist, is a business reporter at the Chicago Sun-Times. She has covered business, politics, education, technology and peace issues, and served as a former president of the Chicago chapter of the Association for Women Journalists.
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"Tips and Resources on Holiday Spending":
"Bankruptcy Law Pushes Women Closer to the Edge":
"This Holiday Season, Give What You Are":