Gift-giving time pressures those paying off debt - The Ericksons

By Kara McGuire, Star Tribune

Last update: September 10, 2007 - 10:40 AM

Malinda Erickson, a 35-year-old office manager for a financial adviser, still is struggling with her emotional money issues and destructive spending habits. One day she spends wisely, as when she wrote a list for Target and was "in and out. It felt really good." On another day she buys herself pet mice, despite being over the limit on both her credit cards.

She also recently lost her car insurance - which she's working to get back- because of late payments and continues to routinely miss the due date for rent on her Coon Rapids apartment. "She keeps having one little crisis after another," says Ruth Hayden, a financial educator and author helping Erickson with her finances.

"I'm worried that closer to the holidays, some of her old beliefs will push in and she'll want to buy nice things for both of her girls," Hayden says. "It's a very seductive time." Erickson, who once filed for bankruptcy, tends to shop when she feels down.

Like McCarthy, Hayden tells clients to set a budget and use only cash. That way, when the money's finished, so is the shopping and spending.

In their meeting, Erickson and Hayden settle on $100 for gifts and $50 to be sent toward one of her credit cards. But days later, Erickson says she's not sure that's going to work. The present her eldest daughter Kayla has in mind costs close to $200 alone, and Erickson is trying to convince other family members to chip in. Then there's her younger daughter, Madison, her dad and her boss to buy for, not to mention the $10 gift exchange at Madison's day care.

But Erickson is used to heading into the holidays with little to spend. "We've had some pretty tight Christmases before." Determined to turn her financial habits upside down she says she's "not backing down or quitting."

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