Cost of giving diminishes Christmas joy

Balancing the difficult reality of cost-of-living pressures with the desire to buy gifts, take holidays and put a feast on the table this Christmas is forcing Australians to make tough decisions.

While some families will rely on cutbacks to achieve this balance, many others are facing a bleak festive season devoid of celebrations, charities warn.

Cost of living pressures are influencing the Christmas choices of 68 per cent of people this year, and 31 per cent say they’re spending significantly less on presents, according to a national survey by Pureprofile.

Younger generations are being hit hardest, with 76 per cent of under-45s saying they are spending less on presents this year, compared to 61 per cent of over-45s.

And while 74 per cent of people say they set a festive budget, 44 per cent admit regretting their spending in previous years, according to ASIC’s Moneysmart.

Just 29 per cent will stick to their plan, with savings, credit cards and buy now, pay later services used to ensure stockings and stomachs are filled.

Maroubra Salvation Army volunteer Guilia Coletti, 34, said Christmas was “very confronting, because we all love our children and we all want to give them the world”.

“But some of us can’t save enough in a year, or really make ends meet to be able to give our families what we would like to,” she said.

“This Christmas, I was at a bit of a loss, because I volunteer all year round, and I’m only on Jobseeker, which is like $400 a week, and a third of that goes on rent.

“For me, it has been a lot more intentional about what I got from my kids this year, because we don’t have much, even if mum’s helping out.

She had chosen board games among her gifts, because it was more about ‘let’s bring this family closer together’.”

With many sales in December, it can be easy to feel pressured into spending more than originally planned, ASIC Commissioner Alan 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,” he said.

The cost of living has also affected Christmas travel plans, with 51 per cent of under-45s saying their decision to travel to be with family and friends has been impacted, compared to 38 per cent of those aged over 45.

But some Australians are prioritising travel, with the Pureprofile research finding more than a quarter of people deem travel to be a non-negotiable outlay, ranking “holidays and travel” as their number one non-essential expense.

Adults plan to spend an average of $783 on Christmas this year, Moneysmart’s research shows.

Around three-quarters of people will fund festivities partly through their savings, 31 per cent will also rely on credit cards, and 16 per cent will turn to buy now, pay later services.

While 35 per cent of people plan to spend less this year, 49 per cent said they would spend the same as last year and 16 per cent planned to spend more than 2024.

Of those looking to make savings, the areas people plan to reduce spending are gifts (47 per cent), holidays (39 per cent) and decorations (38 per cent).

But the Salvation Army said many Australians did not have the luxury of making cutbacks and were instead simply struggling to survive.

“Christmas time only exacerbates the pressure on individuals and families, which is why we know this will be a very hard Christmas for many Australians,” Major Bruce Harmer said.

“It is truly heartbreaking to see the despair and devastating decisions Australians are having to make in order to provide for their families.”

Pureprofile’s research shows 6.3 million Australians (29.9 per cent) will struggle to pay their rent or mortgage this Christmas, and almost one in four parents worry that their children will miss out on presents.

Around 2.5 million (12 per cent) fear their children will miss out on food, and 1.2 million (5.7 per cent) won’t even talk about Christmas with their children because they can’t afford it.

“As we see the devastating results of this research, we are reminded that every number and statistic represents real people, and we see that every day of the year amongst those who reach out to the Salvos for support,” Major Harmer said.

Of the 1.9 million Australians (9.3 per cent) of people who seek help from a charity this Christmas, more than 54 per cent will do so for the first time.

The Salvation Army’s annual Christmas Appeal is aiming to raise $27 million to support those doing it tough.

Moneysmart advises Christmas shoppers to set and track a realistic budget, be mindful when using credit, check bank statements regularly, be vigilant against bad deals and scams and to seek help via the free National Debt Helpline (1800 007 007) if required.

Abe Maddison
(Australian Associated Press)