Huge amount the average Aussie spends on Christmas

It’s the most expensive time of year and the amount Aussies are spending in 2021 is massive – with people in one state being particularly extravagant.

I love Christmas. For me it’s a time of year where everything feels fun. The spirit can be contagious, and it’s easy to get swept up in the moment and go a little overboard.

When it comes to your money choices and spending, it’s easy to get carried away and make choices you regret. If you get it really wrong, you can start the new year chasing your tail and paying the price for months to come.

So how do you avoid having a financial hangover this Christmas season?

Have a Christmas budget

If you want to keep your spending under control through the Christmas season, the first step is to get clear on how much of your money you want to allocate to your Christmas costs. Like when you do a regular budget, the first step here is to lay out all of your predicted spending.

Statistics from Finder show that Aussies plan to spend $17.3 billion on Christmas 2021. When applied to the adult population, this is equivalent to $893 per person.

People in NSW are the biggest spenders, forking out $1010 and WA the least, spending $705 per person. Gifts top the list of festive expenses, with Aussies expected to spend $391 per person.

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Aussies are planning to spend $17.3 billion over Christmas 2021. Picture: Brendan Radke

When planning your own budget, take the time to think through everything.

There’s gifts, but also the other things you might want or need to spend on like food for entertaining mates and family, travel costs, Christmas decorations for your home and anything else that’s important to you.

Once you’ve laid out everything, take a step back and look at the numbers and what’s leftover, making sure it fits with your other money priorities.

Often when you do any sort of budget, you’ll want to circle back and refine your budget until you get to a point where you’re happy with how much you’re spending and what it means for your other money plans.

Given we’re already fairly deep into the current Christmas season, now is the perfect time to be planning for next year. If you plan out your 2022 Christmas budget now, you’ll have the extra benefit of giving yourself an entire year to put money away and make your money management easier next Christmas.

Get Cashed Up

Created by Ben Nash, Cashed Up is news.com.au’s free six-week course to help Aussies get their finances in check. Those who sign up to the budget bootcamp get weekly, step-by-step challenges to improve their financial fitness.

By the end of the six weeks, participants will have set a budget, created a savings plan, learned how to invest, and sorted their superannuation. The interactive course can be started at any time and aims to empower participants to make more informed financial decisions.

Avoid the credit card

Easy access to cash through your credit card can mean you shop without having to think about how you’re spending your money. But if you go too far, you can end up with a nasty shock post Christmas and get stuck paying for Christmas well into the new year and potentially even beyond.

Spending on a credit card can leave you paying for this Christmas for many years to come.

For example, making only the minimum repayments on a Christmas credit card bill of $5000 with an interest rate of 18 per cent you’d pay $12,181 in interest costs and it would take a staggering 33 years to repay the money you owe.

Once you’ve done your Christmas budget, look to use debit cards or cash so you’re forced to track the amount you’re spending and stay in control.

Start strong in the New Year

Whether it’s a new fitness routine, your diet, mindfulness regime, or your money, the new year is a time where we all get a motivational boost that you can leverage to drive some serious results.

But to take advantage of this motivational boost, it’s important you set yourself up for some quick wins. This will help you see progress you can use to further motivate yourself, building your momentum in the process.

If you’ve blown it this Christmas then start 2022 with new intentions.

To get your money momentum kick started, you could make a small investment, hit a savings or debt reduction target, or even just take the time to lay out your game plan for the year ahead. The key is seeing some clear progress, which should satisfy your inner achiever and make you feel like putting in the work to be smarter with your money is worth it.

Another hack you can use is using someone to keep you accountable to the progress you want to make. It could be your partner, a mate or family member, or a professional advisor – but use someone that’s been in your shoes before to ensure you get the support you need to make your plans actually happen.

The wrap

The festive season is an amazing time to let your hair down and enjoy yourself, but don’t make it come at the expense of your financial progress post Christmas. Take the time to get clear on your real money priorities, lay out your Christmas game plan, and then make it happen.

Get your Christmas money plans right and you’ll start the new year on the front financial foot and set yourself up for success in 2022.

Written by Ben Nash, finance expert commentator, podcaster, financial advisor and founder of Pivot Wealth, author of the Amazon best-selling book Get Unstuck: Your Guide To Creating A Life Not Limited By Money.

Ben is putting on a free money education event in the new year on How to build a Passive Income Investing. You can check out all the details and book your place here.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.