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Between the end of the school-year, sales season and the holiday period it’s unsurprising that December is often the most expensive month of the year for Australians. With searches like “how to save money this Christmas” on the rise, we’ve stepped in to provide our insight on the secret to financial success this festive season.
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This year, the Australian Retailers Association (ARA) is anticipating more than $72 billion in retail sales across the six-week period leading up to Christmas, a 4.2% increase from last year. Despite cost of living pressures, Deloitte’s 2025 Retail Holiday Report has found that Australian consumers are planning to spend more than last year, while 84% of retailers are expecting sales growth this season.
In 2025 Australians are looking to give the gift of something to wear – with clothing and shoes anticipated to be the most popular Christmas gifts. Books and toys were the runner-up and will still make up a large portion of the presents under the tree this year.
On average, shoppers are expected to spend $491 on gifts in 2025, with the majority budgeting between $300-$1,000 for giving this festive season.
With a rising cost of living, it’s easy to assume that Aussies are planning to spend less this Christmas. Unexpectedly though, in their 2025 annual holiday report Deloitte found that 33% of respondents expected to spend more this festive season compared to last year. That’s despite only a small portion of shoppers saying they feel “financially confident”. The outcome of these trends are more people looking to utilise credit products, such as credit cards and BNPL.
Not every Christmas needs to break the bank.
With some strategic planning and smart money-saving tips, you can smile more and stress less this holiday season.
The earlier you start saving for Christmas, the less financial pressure you’ll feel as the holiday season approaches. Setting aside a small amount of money each week or month in a dedicated Christmas savings account is a simple way to better prepare for the festive season. This proactive approach will give you a financial cushion when it’s time to start your holiday shopping.
Bonus tip: Get more from your money by keeping your savings in a high-interest savings account. This way you’re rewarded for your forward planning by earning more cash back in the form of interest. Some Australian banks even offer dedicated Christmas saver accounts – often paying bonus interest when you deposit a set amount each month and make no withdrawals throughout the year.
Before starting holiday shopping, establish strict guidelines for gifts, decorations, food and festivities. Be realistic about what you can afford and try to stick to this budget.
This discipline can help prevent impulse purchases and keep your wallet safe from unexpected spending.
Did you know that people are much more likely to overspend when using credit instead of money they already have? A study by MIT found people who paid via credit card were willing to pay up to twice as much for the same item as people who used cash!
As much as you want to celebrate the festive season, it’s important to be mindful of the type of debt you are accruing in the process. Given the high interest rates associated with credit cards, one of the simplest ways to avoid accumulating debt is to choose to pay by debit or cash where possible. This also makes it easier to ensure you stick to your set budget, by physically limiting what you’re able to spend.
BNPL services have become increasingly popular over the past few years, with more and more Aussies choosing these options over traditional credit cards. But while BNPL might feel like a convenient way to shop, it’s easy to overspend when you’re only thinking about individual repayments and not the greater debt accumulating behind the scenes.
BNPL payments are often treated by lenders as debt, and could impact your ability to be approved for a loan in the future. Especially if you’re not disciplined about making repayments on time. It’s also important to mention that following changes in regulation that came into effect in June 2025, BNPL counts as a credit product, and applying to a new provider will result in a mark on your credit report as could late payments.
Buy now, pay later (BNPL) can sometimes be helpful, but the same is rarely said of high-cost debts like payday (short-term) loans and wage advances. Due to their high fees and interest charges, these products can lead to a cycle of debt that’s difficult to escape.
If possible, avoid these types of loans at all costs and look for more sustainable ways to finance your holiday spending.
Do you have a new year’s resolution to get your finances in order? If you are juggling multiple repayments, a debt consolidation Personal Loan could be the solution.
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