Research shows Australians still plan to spend a fortune on Christmas despite economic woes

The economy is in the toilet and there are fears of a looming recession. That’s what makes this new research on spending so surprising.

After a very challenging year, new research indicates embattled Australian retailers look to be in for a Christmas miracle.

Despite ongoing economic jitters and a looming recession, consumer comparison website finder.com.au found people were planning to spend a huge amount of money on presents, food and travel over the festive period.

“The mood out there has seemed pretty grim this year,” Kate Browne, finder.com.au’s personal finance expert, said.

“We’ve had a lot going on this year and so I’m surprised that despite all of that nervousness about the economy and recession fears, Australians still plan to spend a huge amount of money this Christmas.

“Take NSW, where people told us they expect to spend more than $1190 each on average on Christmas, while in Victoria it’s $880 and Queensland is $770.”

The average spend per person in South Australia was $628 and in Western Australia it was $627, Ms Browne said.

Roy Morgan research shows a 2.6 per cent increase in expected total Christmas spending of $52.7 billion.

She had expected this year’s research to show a sharp decline in average planned spend, but the results didn’t go that way at all.

“I think it’s been a tough and uncertain year for many people and Christmas is the time of year to take a break, be with loved ones, eat some nice food and share presents,” Ms Browne said “Many people seem eager to put their worries on hold.”

Recent research by Roy Moran and the Australian Retailers Association found that Australians were likely to spend $52.7 billion in shops across December.

That represents an increase of 2.6 per cent on last year.

But interestingly, the finder.com.au research found that most of the money wasn’t going on presents.

“When you think Christmas, you usually think it’s all about gifts, but when we break down what people are spending their money on, travel tops the list,” Ms Browne said.

“On average, Aussies will fork out about $470 each on Christmas getaways, either holidays or travelling to see family and friends.”

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The finder.com.au research shows most of people’s Christmas spending will go on travel this year.

While the festive cash splash is good news for the economy and struggling retail sector, Ms Browne said the concern rested in how Aussies planned to fund Christmas.

“Some one-in-four respondents told us that they don’t have the cash to cover their costs and will rely on credit cards instead,” she said.

“Putting it all on credit isn’t a great idea. Many people could find themselves with a debt hangover come January and beyond.

“We’re also seeing the buy now, pay later services growing in popularity. It’s another layer of having a means to get things now when you don’t have cash.”

Are you planning to spend more or less on Christmas this year? Share your thoughts in the comments below