Hold your reindeers! 1 in 4 Aussies plan to pull the reins in on Christmas spending

By Katherine O'Chee ·

It’s no secret Aussies love splashing cash at Christmas, whether that’s by whipping out their credit card or dipping into their savings. But new Mozo research has found many are choosing to keep the celebrations low-budget this year, with 28% saying they plan to tighten their spending due to rising costs of living and slowing wage growth. 

According to Mozo’s survey, older Australians aged 45-54 were most concerned about the grim state of the economy, with 40% citing this as a reason to pull the reins in on silly season spending. 

Last year, Australians spent $51.4 billion dollars over Christmas, up 2.9% from 2017. But this year’s numbers are expected to drop across the country, with Mozo Director Kirsty Lamont saying consumers are feeling less cashed up and confident about their finances. 

However, Lamont warned nearly two-thirds of Aussies may end up overspending anyway, with those aged 35-44 set to splurge the most on Christmas shopping - an average $570 per person. 

“We’re predicting Christmas spending won’t be quite as boisterous as last year with many Australians painfully aware of the ballooning living costs and stagnant wages. Despite many consumers intending to cut back on Christmas costs, 62% won’t follow a festive season budget.” 

How will Aussies do their Christmas shopping? 

It seems the Christmas tradition of hitting the stores to buy gifts and other goodies remains alive. Despite the rise of online shopping, 70% of Australians said they still intend to shop in-store. 

But in terms of how Aussies plan to pay for their Christmas shopping, there’s been a rather big shift. In separate Mozo research profiling Buy Now Pay Later users, the new payment platform rose to the top as the most popular way to pay (followed by debit cards and savings), with 27% of respondents saying they intend to cover the majority of their Christmas bill with Buy Now Pay Later services such as Afterpay and ZipPay. 

Lamont said that while Buy Now Pay Later could make your festive spending more convenient, this option means you won’t be able to have a fresh start to your finances in the new year.  

“If you’re planning to put a decent chunk of your Christmas shopping on a credit card or a buy now pay later account like Afterpay, be prepared for those direct debits and bill payments to start rolling in in the new year,” she said.

“Starting the year off with mounting debt can be a tough pill to swallow, so take the time to carefully consider your incomings and outgoings to ensure today’s spending doesn’t become tomorrow’s problem.” 

Tips to stay afloat this festive season 

Scared of drowning in lingering Christmas debt and regret? To help you kick off 2020 with a bang, here are some tips to manage your silly season spending: 

1. Make a Christmas budget - and stick to it! 

Begin by creating a gift-giving list, so you have a clearer idea of how many people you’ll need to buy presents for. If you’re also planning to cook up a storm on Christmas Day, write down an ingredients and food supplies list too. Then, it’s a matter of mapping out your monthly income and expenses in December, and seeing how much you can afford to dedicate to festive spending. 

To stay committed to your Christmas budget (Mozo’s survey shows a whopping 62% of Aussies won’t stick to theirs), it's a good idea to track how much you’ve spent and have left to spend as you make purchases - you could even use a budgeting app to help you stay on top of it all. 

2. Look out for specials

It pays to shop around, and with Christmas coming up, retailers are competing even more fiercely than usual for business. For customers, this is good news, as it means plenty of great deals and discounts could be making the rounds. 

Don’t forget that many retailers will price match too - so if you see more competitive offers elsewhere but the store is too inconvenient to get to, your local shop may be willing to give you the same product at a cheaper price. 

3. Avoid last-minute gifts

As the saying goes, the sooner, the better - and that applies to present shopping too. Chances are you’ll end up spending a lot more if you join the December 24 frenzy where shoppers rush around in a panic, trying to purchase last-minute gifts. 

So make sure to get organised by making a shopping list and buying your presents well in advance. That way, you can look forward to a stress-free week leading up the Christmas day.  

4. Have a debt repayment plan for the new year

If you’re paying for items on a credit card or Buy Now Pay Later account, it could be worthwhile making a repayment plan for the start of the year, so you don’t drown in debt. 

To avoid the sting of late fees and unwanted interest, jot down all future repayments on your calendar, or set reminders on your phone. 

And if you’re really struggling with piling credit card debt, consider switching to a balance transfer credit card to give yourself breathing space to pay down debt at a much lower interest rate, often even 0%. These 0% balance transfer deals are generally introductory offers, which last for anywhere between 3 to 24 months, so be sure to pay off your debt before then. 

Interested in finding out more about credit cards with a 0% balance transfer rate? Check out the deals below, or head over to our balance transfer credit cards comparison table to compare even more options.

Compare balance transfer credit cards - page last updated September 26, 2020

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Katherine O'Chee
Katherine O'Chee
Money writer

Katherine O’Chee is Mozo’s international money transfer and forex expert and business banking writer. She keeps Mozo’s readers on top of the latest news and writes in-depth features to inform and help Australians make smarter financial decisions. Her work has been published in major media outlets including Sydney Morning Herald, SBS News and Bangkok Post. She has a Bachelor of Arts (Media and Communications) from the University of Sydney.