Cost of living crisis forces millions of Australians to cut back on Christmas spending – realestate.com.au

Aussies are cutting back on their spending as they struggle to pay mortgages, rent and everyday expenses like groceries – and this is having a big effect on Christmas this year.

Household debt pressures, rising costs and financial uncertainty have reshaped Aussies’ festive spending this year, new data shows.

Christmas won’t be canceled, but Australians are feeling the pressure and are having to drastically change the way they spend this festive season to make it happen.

New data from Afterpay and ANZ shows Australians are planning to spend a lot less and budget more ahead of the festive season this year to make ends meet.

Australians are spending less on Christmas this year.

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Many Aussies are feeling the pressure on the cost of living, with one in three saying they are worried about the holidays because they are under financial stress, according to Afterpay and ANZ.

Especially now that high housing costs and mortgage repayments are under pressure, they urgently need to cut back on their expenses and almost one in three plans to give fewer gifts this year.

Those who don’t want to ruin the holidays and show up without gifts are turning to Afterpay due to the financial stress the extra expenses can cause them.

During the 2024 holiday season, 3.49 million ANZ shoppers used Afterpay during the festive season.

They placed 360 orders per minute and spent an average of $1,700 each.

Millennials and Gen Z shoppers were the most likely to use Afterpay, with Millenials making up almost half of ANZ Afterpay spend.

Australian families are turning to After Pay to further stretch their finances. Photo: NewsWire / Nicholas Eagar

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Aussies are looking to reduce this figure this festive season, with 44 per cent planning to spend less than last year, while two in five want to spend less overall.

It’s expected that at least 40 percent of shoppers will use Buy Now, Pay Later to spread their spending across the month.

By 2025, Australian families are looking to cut back on their Christmas and holiday spending, hoping to spend less than $750 each on average, while one in three say they have set a budget for themselves.

A whopping 94 percent of businesses say offering ‘buy now, pay later’ says it is ‘vital’ to the success of their business during the peak season – showing just how desperate Australians are to still make Christmas happen, without going into debt.

Nearly three-quarters (72 percent) of shoppers plan to purchase items they can enjoy at home, including self-care and home comforts.

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