As the festive season is upon us, Australians are diving into the Christmas spirit with open wallets. Despite the cost-of-living crisis, it seems that the season of giving has prompted many to give a little too generously, potentially at the expense of their financial well-being.
Christmas in Australia is a time of sun-soaked beaches, backyard cricket, and barbecues. It’s a time when we reconnect with family members and for laughter and sharing stories.
But this year, the backdrop to our celebrations is a little less cheerful. With interest rates holding firm at 4.35 per cent and median rent soaring to $660, the average Australian’s wallet is feeling the pinch.
The Bureau of Statistics’ figures show a grim picture, with the Consumer Price Index (CPI) having climbed by 0.2 per cent in October 2024 and a total increase of 2.8 per cent over the past year. The most significant price hikes have been in areas that hit close to home: culture, recreation, food, and non-alcoholic beverages.
Yet despite this, Sydney’s Pitt Street Mall was bustling with activity, with consumers laden with shopping bags. Finder, a financial comparison website, has spoken with financial experts who predict an increased reliance on credit cards this Christmas. This comes as no surprise when 29 per cent of credit card holders admit they couldn’t manage without one, and the average Australian is saddled with over $3,000 in credit card debt.
A stroll through the streets of Sydney shows this spending prediction. Many Australians openly admit to spending more this year because they are either having ‘way too much fun’ shopping or feeling extra generous.
People setting budgets of $50 to $100 per family member are finding themselves spending beyond their means. One shopper’s spree of $175 at Nike and $80 at both Cotton On and David Jones is a testament to the trend of increased spending.
Yet not everyone is succumbing to the spending frenzy. Some are capping their Christmas budget at $1,000, and are taking a more ‘cautious’ approach.
One woman justified her disregard for the cost-of-living crisis during the holidays with the philosophy that ‘we might die tomorrow’. Another shopper’s ‘f*** you’ attitude towards her Christmas spending shows a broader sentiment—if saving feels impossible, why not indulge?
Financial expert Graham Cooke warns against this dangerous mindset: ‘Credit cards can be a great financial tool to earn points, protect your purchases and build your credit, but they can quickly become a nightmare if you fall behind on your repayments.’
‘Embracing the silly season shouldn’t mean getting in over your head—you don’t want to go into the New Year with a Christmas debt hangover,’ Cooke advises.
As we navigate the joy and chaos of the season, it’s important to remember that the best gifts often don’t come with a price tag. Spending time with loved ones, creating memories, and expressing gratitude are the true hallmarks of a meaningful Christmas.
So, dear readers, as you prepare for the holiday season, consider your financial health alongside your festive plans. Have you experienced the pressure to overspend this Christmas? How are you balancing the desire to give with the need to save? Share your thoughts and strategies in the comments below.
Also read: How to do Christmas on the cheap.