How did your budget pull up after the Christmas break? New research from ASIC’s Moneysmart has revealed that Aussies possibly spent, on average, almost $800 each to fund gifts, holidays and celebrations.
The research reveals 74% of people set a budget for Christmas but more than four in ten (44%) have regretted their spending in previous years. Just 29% managed to stick to their plan, with savings, credit cards and buy now pay later (BNPL) services used to fund the festive spend.
Around one third intended to reduce their spending in 2024 compared to 2023, but more people planned to spend the same amount (49%) while a sizeable number (16%) were planning to spend even more this Christmas.
ASIC Commissioner Alan Kirkland said although many consumers planned to be careful with their cash, the research showed many others were willing to blow their budget at this time of year. This could lead to costly decisions, he suggested, such as putting too much on credit or entering into high interest debt.
‘Even with the best intentions, sticking to a budget can be especially challenging during the festive season, leaving many at risk of falling into costly debt traps”, he said.
‘With a lot of sales in December and Boxing Day around the corner, it can be easy to feel pressured into spending more than originally planned.
Kirkland suggests that if you do find yourself with too much debt there are steps you can take to get back in control.
“This includes setting up a repayment plan, credit card balance transfers or, if you are unable to make repayments, applying for financial hardship assistance through your bank or credit provider.
“ASIC’s Moneysmart website has information and support for Australians to help avoid a post-Christmas spending hangover and to help get debt under control’, he added.
How much did we plan to spend?
On average, adults in Australia estimated they would spend $783 on Christmas this year. Nearly half (46%) hoped to spend less than $500, 21% planned to spend between $500 to $999, while 34% of Aussies estimated they would spend $1,000 or more.
While 35% of people indicated they planned to spend less this season, 49% said they would spend the same as last year and a sizeable 16% planned to spend more than 2024.
Of those looking to make savings, the areas people planned to reduce spending were gifts 47%, holidays 39% and decorations 38%.
Men were more likely than women to plan on spending big with 39% indicating they would spend $1,000 or more, compared with 29% of women.
Millennials were expected to outspend Baby Boomers, with their estimated spend $937 compared to $679.
When it comes to budgeting for Christmas, 74% of Aussies claimed to budget their Christmas spending, although only 29% tended to budget every last cent and stick to it.
This season, 75% of Aussies planned to fund their Christmas spending at least partially through their savings, 31% said they would also rely on credit cards, and 16% on buy now pay later services to fund their costs.
Millennials 81% and Baby Boomers 76% were also most likely to use their savings to fund their spending, while Gen Z 39% and Millennials 41% are more likely to use credit cards.
Post Christmas, around three in ten (28%) indicated they have regretted their Christmas spending and struggled to pay for it, however almost half (45%) say they have never regretted their spending.
Moneysmart advises that if you’ve gone over budget, take proactive steps to regain control. Create a repayment plan for any debt incurred, prioritising paying off high-interest balances first. If you are having trouble repaying your bills you can reach out to a financial counsellor to help you recover and plan for the future. Call the free National Debt Helpline on 1800 007 007, or use their live online chat option.
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