Many people are cutting back on their holiday spend this year due to the cost of living. Meanwhile, scammers are ramping up to make the most of Christmas. We share some tips to help you play it safe to avoid starting 2025 with a financial hangover.
Recent research from Westpac found that nearly half (45 percent) of the customers it surveyed planned to spend less these holidays than last year. Decorations, travel, accommodation, gifts, and fun outside the home were the most common areas on the chopping block.
“We totally understand why people are feeling the pinch,” Westpac NZ Managing Director for Consumer Banking and Wealth, Helen Ryder says.
“Inflation is starting to come down, but costs remain high, and many households with fixed home loans haven’t yet seen the benefit of falling interest rates.”
Ryder says planning ahead helps to avoid the financial stress the holiday season can bring.
“Digging into your finances and going through a spending plan with the whole family is the best way to avoid starting the new year with a debt hangover,” she says.
But a failure to control spending isn’t the only financial threat ushered in with the Christmas carols – scammers up their game too. Radio New Zealand reports that shoppers are increasingly falling for fake online selling sites as it becomes harder to tell what’s real and what’s not online. It says research from Avast Malware has identified nearly 80,000 counterfeit websites posing as genuine retailers targeting New Zealand shoppers of well-known brands like Pandora, Zara, Swatch, and H&M. Netsafe offers the Checknetsafe.nz service, which can be used to check whether a specific web addresses is legitimate or not.
Meanwhile, the Financial Ombudsman Service is warning consumers to read the fine print on ‘interest-free’ loans if they plan to use these to help manage their festive expenses.
While they can seem like a great deal, Financial Ombudsman Susan Taylor says they can come with unwelcome surprises.
“Interest-free loans can be a helpful option when managed carefully, but misunderstandings about repayment terms can lead to financial stress,” she says.
She urges consumers to be cautious and ask questions. It’s important to read the terms and conditions carefully – looking for clauses about repayment schedules, minimum payments, and interest charges after the interest-free period ends, she says. It also helps to plan your repayments, ensuring the repayment structure aligns with your budget, and to be aware that some agreements might initially require higher payments than advertised.
Westpac offers these additional tips for staying on top of your finances this festive season:
- Don’t buy more groceries than you need. How much Christmas ham gets thrown away in the new year?
- Budget for the essentials first, like food and travel, before allocating leftover spending money on items like gifts and decorations.
- Consider alternative gifting options like a “Secret Santa” arrangement.
- Before paying with credit, see if you can reduce costs or use your savings, to reduce the amount of debt that needs to be paid back in the new year.
- Talk to friends and family before going gift shopping to discuss whether you are doing presents, and if so, whether you should set a price limit.
- If you are buying presents, try and get a steer to make sure they are things they need, rather than just things they want.
- Consider sustainable gifts that are meaningful, long-lasting, and environmentally friendly.
