Insane amount of cash we’ll fork out at Christmas
TIS the season to spend money, with many Australians fa-la-la-la falling into debt as a result.
New survey findings show we're set to collectively spend several billion of dollars on gifts for loved ones, and billions more on food, travel and decorations as Christmas rapidly approaches.
A survey by comparison website finder.com.au found total spending over the festive season is projected to hit $25 billion, with Aussies spending $1325 each on average.
"We found that people expect to spend on average $464 each on presents, $444 on travel, $131 on alcohol, $122 on food and $61 on decorations," finder.com.au personal finance expert Kate Browne said.
"This is what people estimate they're spending though - there's a good chance many will spend much more, as we tend to do at Christmas."
While the overall figure this year is "massive", Ms Browne said it was down slightly on 2017 results - particularly when it comes to presents and holiday travel.
"This year, Aussies expect to collectively fork out $8.8 billion on presents. The individual average is down a little bit on last year by $28. Christmas travel is also down by half this year, which is interesting," she said.
The reduction across those two major categories could be a sign that rising cost of living pressures are beginning to bite, thanks to electricity and fuel price hikes.
"Usually, a lot of us throw caution to the wind and spend big at Christmas but I get a sense that there's a high awareness of the need to be a bit more frugal," she said.
Women are projected to spend $1406, more than men who on average who will shell out $1241 each.
Of the 2013 respondents, those in Western Australia expected to spend the most in the country with $1416 per person, while those in South Australia projected the smallest outlay of all states on $1250.
Ms Browne said the data showed a big chunk of Australians expected to go into debt or rely heavily on credit cards to fund their festive seasons.
And it seems many will experience buyer's remorse when Christmas has passed.
A survey by AMP found two-thirds of people experience regret about the amount of money they spend on Christmas.
More than half of people surveyed couldn't say how much they spent last Christmas because they hadn't kept track.
A reason for that might be the popularity of tap-and-go payments using plastic, with the ease making it tricky to stay on top of spending.
Research by Money Smart found that 40 per cent of the total Christmas spend in 2017 was on credit cards. Canstar said that accounts to an average individual splurge of $3342 on credit.
All of that spending often results in a "financial hangover" that kicks in at the end of January when people return to work and begin the new year, Ms Browne said.
"What we see is a big uptake in queries about zero per cent credit card balance transfers in January and February," she said.
"Last year, Australians collectively racked up $29 billion in credit card debt at Christmas. Credit cards are obviously very convenient but not everyone is going to be able to pay it off easily. That's a concern. You need to be realistic about how you're going to pay that off."
Leah Dobihal from RateCity.com.au said Aussies should set and stick to a realistic budget before beginning their Christmas gift shopping.
"To begin your budget, you'll first want to make a list of everyone you plan to buy for before you head to the mall," Ms Dobihal said. "Assign a budget to each gift, and don't forget to add those pesky extras like wrapping, bows or postage if you need to mail any gifts."
The Australian Retailers Association said September trade figures released last week indicated it would be a bumper Christmas season.
ARA executive director Russell Zimmerman said there was confidence in the sector after a 3.67 per cent total year-on-year increase in the month.
The Australian Securities and Investments Commission's Money Smart initiative urged consumers to understand the terms and conditions of buy now, pay later offers, and to be cautious of their credit spending.
"If you don't have the cash to pay for your Christmas goodies upfront, you might be tempted to use your credit card, or use a buy now, pay later service. Although these are convenient ways to get the things you need now, that convenience can cost you dearly if you find yourself still saddled with Christmas debt well into 2019."