Consumers are being urged to avoid a post-Christmas spending hangover as new research from ASIC’s Moneysmart reveals Aussies will spend on average almost $800 each to fund gifts, holidays and celebrations.
The research reveals 74% of people set a budget for Christmas but more than four in ten (44%) have regretted their spending in previous years. Just 29% manage to stick to their plan, with savings, credit cards and buy now pay later (BNPL) services used to fund the festive spend.
Around one third of Australians (35%) intend to reduce their spending this year compared to 2023, but more people are planning to spend the same amount (49%) and a sizeable number (16%) are planning to spend even more this Christmas.
ASIC Commissioner Alan Kirkland said although many consumers planned to be careful with their cash, the research showed many others were willing to blow their budget at this time of year. Commissioner Kirkland said this could lead to costly decisions, such as putting too much on credit or entering into high interest debt.
‘When it comes to buying gifts, it really is the thought that counts – plan your spending, stick to your budget and avoid entering into high interest debt,’ Mr Kirkland said.
‘Even with the best intentions, sticking to a budget can be especially challenging during the festive season, leaving many at risk of falling into costly debt traps.
‘With a lot of sales in December and Boxing Day around the corner, it can be easy to feel pressured into spending more than originally planned.
‘If you do find yourself with too much debt there are steps you can take to get back in control. This includes setting up a repayment plan, credit card balance transfers or, if you are unable to make repayments, applying for financial hardship assistance through your bank or credit provider.
‘ASIC’s Moneysmart website has information and support for Australians to help avoid a post-Christmas spending hangover and to help get debt under control.’
How much Aussies plan to spend
On average, adults in Australia estimate they will spend $783 on Christmas this year. Nearly half (46%) plan to spend less than $500, 21% plan to spend between $500 to $999, while 34% of Aussies plan to spend $1,000 or more.
While 35% of people indicated they plan to spend less this year, 49% said they would spend the same as last year and a sizeable 16% planned to spend more than 2024.
Of those looking to make savings, the areas people plan to reduce spending are gifts 47%, holidays 39% and decorations 38%.
Men are more likely than women to plan to spend big with 39% indicating they would spend $1,000 or more compared to 29% of women.
Millennials will outspend Baby Boomers this year, with their estimated spend $937 compared to $679.
Christmas budgets
When it comes to budgeting for Christmas, 74% of Aussies claim to budget their Christmas spending, although only 29% tend to budget every last cent and stick to it.
Millennials are more like than Baby Boomers to budget their Christmas spending – 78% compared to 71%.
And in a competition of the younger generations, Millennials are more likely than Gen Z to budget every last cent and stick to it – 32% compared to 20%.
Paying for Christmas
This year, 75% of Aussies are planning to fund their Christmas spending at least partially through their savings, 31% say they will also rely on credit cards, and 16% on buy now pay later services to fund their costs.
While BNPL may be a smaller component of overall spending it is used across generations with Millennials 24%, Gen X 20%, Gen Z 12% and Baby Boomers 10% all indicating they may use it.
Millennials 81% and Baby Boomers 76% are also most likely to use their savings to fund their spending, while Gen Z 39% and Millennials 41% are most likely to use credit cards.
Post Christmas, around three in ten (28%) indicated they have regretted their Christmas spending and struggled to pay for it, however almost half (45%) say they have never regretted their spending.
And of those surveyed, they said it would take nearly 4 months (3.68 months) to pay off a $1,000 debt, potentially still paying for Christmas as Easter comes around.
ASIC’s Moneysmart tips this Christmas
Set a realistic budget: Before you start shopping, decide how much you can afford to spend. Break it down into categories like gifts, food, decorations, travel and entertainment. Track your spending to stay on target.
Be aware of using credit: Pay with cash or debit card and avoid using things such as credit cards and or buy now pay later that you can’t afford. If you do use credit products, stick to what you can afford to repay in full. Consider balance transfers to save on interest but be mindful of fees and repayment deadlines.
Monitor your accounts regularly: Keep an eye on your credit card and bank statements during the holiday season. Report any suspicious transactions to your bank immediately.
Be aware of bad deals or scams: Watch for red flags like “too good to be true” prices, limited-time offers pressuring you to act quickly, or poorly rated or unknown online retailers. Stick to reputable stores, and research sellers before buying.
Get help if you need it: If you’ve gone over budget, take proactive steps to regain control. Create a repayment plan for any debt incurred, prioritising paying off high-interest balances first. If you are having trouble repaying your bills you can reach out to a financial counsellor to help you recover and plan for the future. Call the free National Debt Helpline on 1800 007 007, or use their live online chat option.