For many Kiwis, Christmas is a time of celebration and enjoying time with family and friends, but there’s a major downside to the season, too.
It’s become an incredibly expensive time of year that puts a huge strain on finances.
The silly season doesn’t mean you have to be silly with your money! There are things you can do to ensure you can still enjoy the season while keeping on top of your money situation.
Keep reading to learn more about why the holiday period is so expensive, and what you can do to ensure your finances are sorted before Christmas.
Why is it so expensive?
There’s no denying that the costs associated with Christmas have risen over the years.
The pressure to buy gifts, host parties and attend events can add up quickly, leaving many Kiwis feeling overwhelmed and financially strained.
In fact, research shows that New Zealanders tend to spend an average of $1500 per household during the holiday season.
Food is one of the classic ways we celebrate, but even that has become an enormous burden for households whose budgets are already stretched.
Meal kits are marketed as a money-saving option, but research shows Christmas meal kits can cost up to 65% of the average person’s weekly food bill!
In 2023, demand for credit increased by 8% in the leadup to Christmas, with many people taking out credit cards and buy-now-pay-later (BNPL) products to see them through.
One could reasonably expect this trend to continue this year, as the economic situation has only gotten worse in 2024, with unemployment soaring and many more people struggling to make ends meet.
According to Centrix’s October Credit Indicator, “We expect arrears to rise over the summer period, in line with forthcoming festive spending and wider seasonal trends”. Source: centrix.co.nz.
Other reasons the holidays can be a burden
It’s not just Christmas itself that can be the cause of financial difficulty for Kiwi households. There are other challenges the season brings that can hit people in the pocket.
End of year celebrations
As the year wraps up, events like New Year’s Eve parties, work functions, and family gatherings lead to increased spending.
Many Kiwis purchase new summer outfits, and host barbecues or elaborate meals, all contributing to higher expenses. These costs can strain budgets and leave many scrambling to cover gaps.
Increased travel costs
A lot of people travel to be with loved ones over the holidays, but this can also be the most expensive time to travel.
Recent research by Consumer NZ showed that Air New Zealand’s airfares increase massively during school holidays, with families paying thousands of dollars more to fly than if they travelled during the school term.
Disruption to income
Most businesses in New Zealand shut down over the Christmas-New Year period, giving workers a chance to have a break.
But what if you’ve just started a new job and you don’t have enough leave to cover it?
This could leave you with a period of two weeks or more when you’re not receiving any income, making the holidays an especially stressful time for you and your family.
Back to school
If the cost of Christmas isn’t enough, parents are then hit with back-to-school costs.
Stationery, uniforms, school fees, devices – these all add up quickly! For children starting new schools, costs can be as much as $2000.
How to sort your finances out
It’s not all doom and gloom – there are things you can do to be proactive and get on top of your finances before Christmas.
If the cost of your loan repayments is a drag on your finances, consider a debt consolidation loan.
Auckland Loans can take your existing debt and combine those loans into one new loan at a lower interest rate.
With interest rates from just 9.95% (secured loans) and 11.95% (unsecured loans), it’s likely your loan repayments will be significantly reduced.
Not only that, but we can also structure your loan to make it more affordable, spreading your repayments over a longer term of up to 7 years.
This means you have more money in your pocket each week, putting less strain on your finances.
Solutions if you have bad credit
Worried that your credit score will make it hard to get a loan?
At Auckland Loans, we believe in second chances, which is why we work hard to find solutions for our clients, no matter what their credit score says.
We work with our network of quality, low-cost lenders to find the best deal for you, even if your credit score is less than great.
As long as you have enough regular income to cover the repayments, there’s a good chance we can find a positive outcome for you.
Act now and complete our super quick 2-minute application form, and we’ll be in touch to discuss the next steps.
