Why Are Australians Cutting AU$1.6B From Their Christmas Spending This Year?

Australians are cutting back on festive spending this year, with estimates showing shoppers are likely to slash the total budget by AU$1.6 billion, compared to last year.

According to Finder's latest research, the average Australian plans to spend AU$1,357 on Christmas, which constitutes AU$28.4 billion nationwide. Compared to the average spend of AU$1,479 (AU$30 billion countrywide) in 2023, this indicates an 8% decrease, Nine News reported.

Financial worries are causing homeowners to cut their Christmas budgets by AU$122, according to Sarah Megginson, a personal finance specialist at Finder. Australians are predicted to spend AU$359 on gifts on average this year, which is 4% less than the AU$373 average from the previous year.

"The festive season can be financially stressful, particularly after a challenging couple of years marked by inflation and high interest rates," Megginson said.

Since eating out is a must over the holiday season, Australians have budgeted for their expenses (AU$244 on food, AU$173 on going out and AU$145 on alcohol).

"Instead of gifts for all the people in your life, consider adjusting traditions, like doing Secret Santa or contributing to a potluck dinner, or giving 'acts as service' as a gift – cooking a special meal, babysitting for the night, or helping in the garden," she said.

"While Christmas may look a little different for many this year, it's still possible to celebrate without accumulating debt or financial stress."

Megginson suggests planning ahead and setting a realistic budget may lessen the financial burden on households.