Spend Smart Stay Merry

The lead-up to Christmas is a magical time — fairy lights, carols, and time with family and friends. But let’s face it: for many Australians, it’s also the most expensive time of the year. According to Finder’s 2024 Christmas Spending Report, Australians are expected to spend around $27 billion this festive season, with an average of $1,450 per adult going towards gifts, food, travel, and celebrations.

It’s easy for costs to spiral out of control — and for January’s credit card bill to bring you back down to earth. But with a little planning and mindful spending, you can enjoy the season without blowing your budget.

The Cost of Christmas

Research shows that gifts are the biggest expense, making up around 40% of festive spending, followed by food and alcohol (30%), travel (20%) and decorations or entertainment (10%). Worryingly, Finder reports that around 35% of Australians put Christmas expenses on credit cards, with many taking up to six months to pay them off — costing hundreds of dollars in interest.

Overspending can lead to financial stress, which impacts mental health and relationships. The National Debt Helpline often sees a surge in calls every January from people struggling with post-Christmas debt.

Common Christmas Spending Mistakes

Impulse Buying

Leaving shopping to the last minute often means panic purchases and overspending on items you didn’t plan for.

Not Setting a Budget

Without a clear limit, it’s easy to underestimate how much you’re spending until it’s too late.

Overusing Buy Now, Pay Later (BNPL) Services

Platforms like Afterpay can be handy, but multiple instalment plans can quickly snowball into debt.

Trying to Please Everyone

Buying gifts for everyone you’ve ever met can blow the budget. Thoughtful doesn’t have to mean expensive.

Tips for a Budget-Friendly Christmas

1. Make a List & Check It Twice

Write down everyone you’re buying for and set a spending limit per person. Total it up and check it against your budget before shopping.

2. Shop Early (or Late!)

Early birds avoid the December price hikes and stock shortages. Late shoppers can snag Boxing Day bargains for next year — just be disciplined enough to store them safely.

3. Use Cash or Debit Where Possible

Research from ASIC’s Moneysmart shows that people spend up to 20% less when using cash versus credit. If you do use credit, have a repayment plan.

4. Consider Kris Kringle or Secret Santa

This keeps costs down and ensures everyone still gets a surprise gift.

5. DIY & Experiences Over “Stuff”

Homemade gifts, baked treats, or offering your time (babysitting, cooking a meal, helping in the garden) can be more meaningful than another pair of socks.

6. Track Your Spending

Use a budgeting app or even just your phone’s notes app to keep tabs on purchases. Awareness keeps you accountable.

7. Plan for Next Year

Set aside a “Christmas fund” starting in January — even $20 a week builds up to over $1,000 by next December.

By: By Con Barbayannis, CPA: Dec25