Westpac NZ is encouraging Kiwis to have a great time this Christmas without adding to financial stress, as new research shows nearly half of people are expecting to spend less money this summer amid cost of living pressures.
A survey of 1,110 Westpac customers found 44% expect to spend less than last year, compared with just 16% who expect to spend more. 40% say they will spend the same.
Holiday accommodation (47%), travel (45%), gifts and dining out (both 43%) were all in line for a reduction in spending, while decorations topped the list with 61% of respondents planning to spend less this festive season.
Groceries are the only key item on which more people say they expect to increase their spending (33%) rather than decrease (25%) compared to last summer.
Westpac NZ Acting General Manager of Consumer Banking and Wealth Helen Ryder says the end of the year can be financially stressful, but there are ways to still have fun, generate festive cheer and manage your budget at the same time.
“We want families to enjoy their hard-earned break and head into 2024 feeling in control of their finances. The first step for anyone worried about their finances should be to draw up a spending plan for the holidays and stick to it,” Ms Ryder says.
“The holidays are primarily about getting together with family and friends, celebrating and reconnecting. There are many ways for it to be fun without being overly expensive or excessive.
“Drawing up a budget including food, travel and gift-buying costs can help keep you on track. Make sure your budget is realistic, make sure the whole family is engaged with it, so everyone’s expectations are set, and then make a plan to stick to it.
“We’ve still got a couple of weeks till Christmas. Buying some of your non-perishable grocery items in your weekly shop and taking advantage of sales is another great way to spread the cost.
“And if you’re hosting lunch or dinner make sure the whole extended family are contributing.”
Westpac recently wrote to customers with tips on how to save during the holidays and avoid a holiday spending hangover. Key tips include:
- Don’t buy more groceries than you need. How much Christmas ham gets thrown away in the new year?
- Budget for the essentials first, like food and travel, before allocating leftover spending money on items like gifts and decorations.
- Consider alternative gifting options like a “secret Santa” arrangement or pre-loved presents.
- Before paying with credit, see if you can reduce costs somewhere or use your savings, to reduce debt to pay back in the new year.
- Talk to friends and family before going gift shopping to discuss whether you are going to do presents, and if so, whether you should set a price limit.
- If you are buying presents, try and get a steer to make sure they are things they need, rather than just things they want.
- Consider sustainable gifts that are meaningful, long-lasting and environmentally-friendly.
“The encouraging news is that nearly three-quarters of respondents are planning to pay for their summer spending from within their normal everyday spending, with just 15% intending to take on extra debt in the form of credit card spending or overdrafts,” Ms Ryder says.
“However, only one in three customers say they’ve created and are following a holiday budget, including using budgeting tools.
“It’s not too late for those who haven’t. We’d encourage everyone to put a plan around these costs to take some of the stress out of the holidays so you can focus on the things that really matter – spending quality time with whanau.”
