Today I’m going to share with you some statistics on how much Australians spend at Christmas time, how much of it is put on credit cards, and 5 ways on how we can avoid overspending during the silly season.

Let’s get started!

Christmas is a wonderful time of the year, full of joy, laughter, and celebration. But it can also be a stressful time for our wallets, as we splurge on gifts, food, drinks, travel, and entertainment. According to Finder, Australians are set to fork out $30 billion on everything from presents to pina coladas this festive season. That’s equivalent to a 10% increase compared to last year’s estimated $27.3 billion spend. The average Aussie is expected to spend $1,479 this Christmas on presents, food, alcohol, eating out and travel. That’s a lot of money!

But how are we paying for all this? Well, not all of us are using our savings. In fact, Finder predicts that the nation likely borrowed $24.3 billion on credit cards in December 2020. That works out to be a debt bill of $1,748 per card. Taking into account an average 55-day interest-free period, it’s expected that the interest from Christmas shopping will cost Aussies $194 million. Ouch!

That’s not all. Millions of Aussies are also turning to buy-now, pay-later services like Afterpay and Zip to fund their festive purchases. These services allow you to buy something now and pay it off in instalments over time, usually without interest or fees. However, they can also tempt you to spend more than you can afford, and if you miss a payment, you could face late fees and damage your credit score.

So how can we avoid getting into debt this Christmas and enjoy the holidays without breaking the bank? Here are 5 tips that can help you save money and stay in control of your finances.

1. Shop during the sales. You can pick up Christmas goodies for a fraction of the regular price during the pre-Christmas sales. During this time huge discounts are offered across a range of fashion, homewares, electronics and more. You can also shop online and compare prices from different retailers to find the best deals.
2. Set a budget ahead of time. Before you start shopping, make a list of all the people you need to buy gifts for and how much you want to spend on each one. Then stick to your budget and don’t let impulse buys or peer pressure sway you. You can also use apps or tools like Finder’s budget calculator to track your spending and see where you can cut back.
3. Implement a gift giving limit with loved ones. You don’t have to buy expensive or extravagant gifts for everyone on your list. You can agree with your family and friends on a reasonable limit for each person or do a Secret Santa or Kris Kringle where you only buy one gift for one person. You can also opt for homemade or personalised gifts that show your thoughtfulness and creativity.
4. Skip trips away and stay at home. Travel is one of the biggest expenses during Christmas, especially if you have to fly interstate or overseas to visit relatives or friends. You can save money by staying at home and enjoying local attractions or activities instead. You can also host a potluck or picnic with your loved ones and share the cost of food and drinks.
5. Use cash or debit cards instead of credit cards or buy-now, pay-later services. If you use cash or debit cards, you can only spend what you have in your bank account and avoid getting into debt or paying interest. Credit cards and buy-now, pay-later services can be useful if you pay them off in full before the due date, but they can also lead you to overspend and accumulate debt if you’re not careful.

I hope these tips help you have a merry and debt-free Christmas! Remember,

It’s not about how much you spend, but how you spend time with your loved ones.

Matthew, Funded Futures Financial Services (unless someone can find it published somewhere as I couldn’t)

Happy holidays!