Aussies are going into debt to fund the silly season, according to new research by Finder, Australia’s most visited comparison site.
A nationally representative survey of 1,054 respondents revealed 24 per cent will rely on some form of credit to cover the cost of Christmas this year – equivalent to 4.8 million Aussies who will be pushed into debt this festive season.
The research found 13 per cent will depend on their credit card, while 9 per cent will turn to buy-now-pay-later services for expenses incurred.
Majority of Australians (53 per cent) will rely on their savings – equivalent to 10.6 million people.
According to Finder’s RBA Cash Rate Survey, 3 in 4 (76 per cent, 19/25) experts say Aussies are more likely to turn to credit cards and BNPL to fund the festive season compared to last year.
This may not lead to a bumper year of spending as just over half (55 per cent, 16/29) said Christmas spending would be lower than previous years.
Rebecca Pike, money expert at Finder, said the cost-of-living has pushed Australians to dive into their savings or think of going beyond their means this silly season.
“It’s been a hard year for many, so coming up short for cash is nothing to be embarrassed about.
“Whilst it might seem like a good idea at the time, using credit as a means of funding the holiday season if you don’t have the cash readily available, could come back to bite you.”
With the cost-of-living skyrocketing, Finder research also reveals almost three quarters (72 per cent) of Australians are taking some action to save money in the lead up to Christmas – equivalent to 14.4 million who are feeling the pinch.
More than 1 in 10 (11 per cent) have taken on a second job or side hustle to cover the cost.
Pike said the holiday season is short-lived but debt can take ages to pay off so you could be left paying the price long after the tree has been put away.
“Festive spending can lead to new year blues.
“Avoid blowing your budget by setting up a credit limit you’ll be able to pay off.
“If you find yourself struggling to pay off debt in the new year, speak to your bank or provider to see what support is available,” Pike said.
How do you primarily plan on funding this holiday season?
Savings 53 per cent
I don’t plan on buying anything for the holiday season 20 per cent
Credit card 13 per cent
Buy now pay later (e.g. Afterpay) 9 per cent
Other 3 per cent
Personal loan 1 per cent
Refinancing my home loan 1 per cent
Source: Finder survey of 1,054 respondents, October 2022
What are you doing to save on the cost of the holiday season?
Buying food/presents early 38 per cent
Shopping during the sales season (Black Friday, Cyber Monday etc) 25 per cent
Implementing a gift limit with loved ones (e.g. price limit, only buying for one person etc) 25 per cent
I’m not preparing for the cost of the holiday season 19 per cent
I have opened a holiday season savings account/started saving already 13 per cent
I have started a side hustle/side job 11 per cent
Making gifts 10 per cent
I don’t celebrate the holiday season 9 per cent
I’m not exchanging presents this year 7 per cent
Regifting 5 per cent
Source: Finder survey of 1,054 Australians, October 2022
*Respondents could select all that apply
How to save money this Christmas:
– 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.
– Set a budget ahead of time. Many people get caught up in the spirit of festive giving and before long have spent far more than they expected. Keep costs down by budgeting ahead of time for gifts, decorations and food. You can create your own or use a Christmas Budget Planner to help you keep your Christmas costs down.
– Online shopping can be cheaper for first-time customers. Many retailers offer a 10–20% discount for first-time customers who sign up online with an email address. This is an easy way to score a deal and you can always unsubscribe at a later date.
– Don’t say “yes” to everything. From end of year celebrations to office Christmas parties, silly season merrymaking can come with a hefty price tag. It’s okay to turn down the odd event here and there. This can end up saving you a small fortune over the holiday period.
