As the tinsel twinkles and carols fill the air, many Australians are facing a festive season with a tighter grip on their wallets. The cost-of-living crisis has become the uninvited guest at this year’s Christmas celebrations, prompting millions to rethink their holiday spending. Westpac’s latest research has shed light on the significant changes Australians are making to navigate these financially challenging times.
The bank’s exclusive findings reveal that over two-thirds of Aussies are planning to scale back their Christmas expenditures, with presents, festive feasts, and holiday travel all facing cuts. The reason? A whopping two in five attribute this frugality to the relentless squeeze of cost-of-living pressures, while more than a quarter are reducing gift spending to accommodate the rising costs of food and travel.
Take Perth’s Louise Connors, a mother of six, who has felt the pinch on her family’s budget. Living off her husband’s $70,000 salary from his water pressure business, the Connors have found themselves saving only the ‘bare minimum’ for occasions like Christmas and birthdays. ‘Normally, I’d start Christmas shopping in January, but this year, due to increased cost-of-living pressures, I started a little later in June,’ Louise shared. Her strategy? Set aside money each month and hunt for sales.
In Sydney, Laura Koefoed’s story echoes a similar theme. After a year fraught with personal upheavals, including a breakup and two moves, Laura has decided to forgo presents altogether. ‘The cost of living, rent, and bills are also very high. I don’t have the funds to buy every friend and family member a present this year,’ she explained.
Yet, it’s not all about cutting back. Westpac’s research indicates that when it comes to children, Australians are still willing to indulge a little. Jason Hair, Westpac’s managing director of consumer finance and chief digital officer, notes that parents are planning to spend an average of $419 per child. Louise Connors, for instance, is budgeting between $200 to $400 per child and keeps a running list of gift ideas on her phone to avoid last-minute panic buying.
For those who are buying presents, the focus is on the kids, with a quarter of Aussies dedicating the largest portion of their gift budget to their children, followed by significant others, with an average spend of $303. Gifts for parents and siblings are also on the list, though they come with a more modest price tag.
So, how can you avoid the financial pinch this Christmas? Sarah Megginson, a personal finance expert from Finder, advises Australians to determine what’s affordable for them and to adjust their holiday expectations accordingly. Her tips for a budget-friendly Christmas include:
- Celebrate on a different day when travel costs like flights and petrol are lower.
- Embrace a Secret Santa approach or focus on gifts for the children only.
- Start your gift shopping early to spread out the expenses.
- Simplify your Christmas meal to just the essentials.
Moreover, Westpac found that half of Aussies are planning to leverage discounts, cashback offers, or credit card points to make their Christmas budget stretch further. ‘Managing money during the peak festive spending season can be stressful,’ Hair said. ‘So people are more mindful of their spending, setting a budget, using discounts, and shopping in advance during sales to manage their costs.’
How are you prioritising your holiday spending this year? What’s your best advice for staying within budget during the holiday season? Let’s help each other out—leave a comment below! We’d love to hear your strategies for budget-friendly celebrations.
Also read: Australians reveal their massive Christmas spending
