Festive Finances: How to Save Money This Christmas

Christmas is a time of giving, joy, and celebrating with family and friends. Unfortunately, it’s also often a time to spend lots and lots of money.
William Jolly  |  

With the cost of just about everything weighing on our minds more and more - some might call that the cost of being alive, or ‘living’ - it’s more important now than ever to look to cut down on expenses this Christmas.

In this article, we’ll run through the top 20 tips on how to save money for Christmas. We’ll also provide some handy stats on what we like to buy each festive season and just how many of us are planning on cutting back.

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Christmas statistics: spending by state, category, and more

How much do we spend on a typical Christmas?

A lot. That’s the short answer. For the long answer, the Australian Retailers Association (ARA)’s data shows Christmas 2022 was a record-breaking year in sales, with Aussies spending $74.5 billion in the lead-up to Christmas.

That was an 8.6% increase on the year before ($68 billion). What’s more, Boxing Day 2022 sales grew by 15.3% year-on-year to a massive $1.23 billion - in just one day!

“This is, without a doubt, the biggest festive season spend on record – it is unprecedented,” ARA CEO Paul Zahra said.

“It is remarkable that in this period of economic turbulence, traders have well and truly smashed it out of the ballpark as consumers revelled in ‘freedom’ spending.

“There are many elements driving this record spend. Australians are seeing shopping as an experience and a reward after such a challenging period.

“We also know that price increases continue to elevate these numbers with many Australians also motivated to get in ahead of price rises and leverage savings during the sales events.”


Predicted sales for 2023 are set to be broadly in line with these figures from 2022, albeit marginally (0.1%) higher. 

“Last year, Christmas spending was bolstered by a record freedom spending phenomenon with delayed overseas travel, whereas this year – shoppers are expected to be much more conservative with their budgets,” Mr Zahra said.

“This year, we anticipate a bargain-driven Christmas shopper who will actively seek out the best deals and look for value purchases.”

Christmas spending by category

While you might think presents and food would be the two most significant Christmas expenses, it’s actually flights and travel.

That’s according to Finder’s Christmas survey in October 2023, which found the average travel spend per person at Christmas time was an estimated $533 per person. This is closely followed by presents ($373) and food ($249).

Alcohol ($192 per person) and eating/drinking out ($133) were also significant expenses. Overall, Finder’s survey found the average Aussie will fork out $1,479 on Christmas in 2023.

This spending also varies wildly by age. Millennials are predicted to be this year’s biggest spenders at $1,924 per person, while Gen Z plan to spend the least ($1,023).

Christmas spending by state

Finder’s data suggests Victorians will be the biggest spenders this Christmas at $1,765. New South Wales shoppers will be a close second, while Queenslanders are the most frugal ($1,064 per person).

Are Aussies cutting their Christmas budgets this year?

With energy bills, fuel, rent and mortgage costs, groceries and just about everything else causing financial pain, many Australians plan on tightening the purse strings and cutting back on their expenses this Christmas.

Three-quarters of shoppers plan on scaling back their Christmas purchases to manage stretched budgets, a PayPal survey discovered. That’s a 35% increase on the same figure 12 months prior. Finder’s research found that 69% were slashing their pre-Christmas spending to try and save.

One-fifth of the 1,000 respondents said Christmas-related spending made them worry about their financial situation, with the typical Aussie stressed about coping with the increased cost of groceries (63%), fuel (52%) and energy and utility bills (51%).

Compare the Market’s Natasha Innes said it was unsurprising that so many Australians would be watching their spending this Christmas.

“While inflation may be easing, we’re still being hit with high prices from every angle right now, and unfortunately, many people say they will cut back on spending this Christmas,” Ms Innes said.

“The reality is that the dollar isn’t going to stretch as far as it has in the past when it comes to presents. However, it’s good that Australians appear to be setting a budget for the holiday season. 

“The last thing we want to see is anyone getting into debt or dipping significantly into their savings to buy presents. Making a budget (and checking it twice) is a great first step in beating rising costs this Christmas.”

20 tips to save money this Christmas

Yes, everything is more expensive now, which makes it a lot more challenging to make Christmas memorable for your loved ones. But the good news is that with some strategic planning and savvy savings tips, it’s possible to enjoy an unforgettable Christmas without breaking the bank. 

Here are 20 practical tips to help you save money not only this holiday season but for all future holiday seasons.


1. Start saving now!

The earlier you start saving for Christmas, the less financial pressure you’ll feel as the holiday season approaches. Set aside a small amount of money each week or month in a dedicated Christmas savings account. This proactive approach will give you a financial cushion when it’s time to start your holiday shopping.

According to customer data from NAB, 22% of all active savings goals in the NAB App aimed to save money for Christmas shopping, with an average savings of $4,300 by Christmas Eve 2022!

A great way to boost your savings - aside from automatically transferring a set amount to a dedicated account each week - is to make sure you’re on the highest interest rate possible. By looking at comparison sites such as Canstar, we can see the difference between the lowest (0.45% p.a.) and highest (5.55% p.a.) ongoing savings account interest rate is more than 5% p.a.

If you started saving on January 1st and deposited $100 a fortnight into a separate account, here’s what you’d have saved by Christmas Day in those two accounts with vastly different interest rates:

  • Savings at 0.45% p.a: $2,606 
  • Savings at 5.55% p.a: $2,676

The higher the interest rate and the more you save regularly, the greater your savings will be.

2. Set a hard budget

Before starting holiday shopping, establish a strict budget for gifts, decorations, food and festivities. Be realistic about what you can afford and stick to this budget.

This discipline will help prevent impulse purchases, which are all too familiar at Christmas time.

3. Create a gift list

Once you’ve got your budget, list all the people you need to buy gifts for and allocate a specific amount for each person. This list will serve as a roadmap for your holiday shopping, helping you stay organised and on budget.

You might find that some people are easier and less expensive to buy for than others, or you might find that you don’t actually need to buy for that person at all!

4. Do a Secret Santa

If you have a large family or many friends, consider organising a Secret Santa gift exchange. This tradition allows each person to give and receive one gift, reducing the overall number of presents you need to buy.

5. Limit kid’s gifts with the four-gift rule

The four-gift rule is a popular way to manage children’s expectations and keep spending in check. The rule dictates that each child receives four gifts: something they want, something they need, something to wear, and something to read.

Nearly one in five (18%) Aussies are implementing gift limits for friends and family this year to save on holiday costs, according to Finder’s research.

6. Can you make a gift?

Homemade gifts are a thoughtful and cost-effective alternative to store-bought items. If you have a particular skill, such as baking, knitting, or crafting, consider making some of your gifts this year.

7. Can you re-gift something?

Let’s face it: we’ve all received a present for Christmas or our birthday that we just absolutely hated. Some of those gifts might still be locked away in a cupboard somewhere, right up the back, so you don’t have to look at them.

As the old saying goes, one man’s trash is another man’s treasure. So why not look at your belongings and see if there’s anything you can re-gift? Ensure that the item is in good condition and appropriate for the recipient.

8. Use debit over credit

Did you know that people are much more likely to overspend when using credit instead of money they already have? There are multiple studies to back this up: one classic study by the Massachusetts Institute of Technology found people who paid via credit card were willing to pay up to twice as much for the same item as people who used plain old cash!

Other studies by Dun & Bradstreet (illion in Australia) and The Federal Reserve Bank of Boston found this disparity to be between 12% - 18%.

This preference for buying things on debt becomes more of a problem at Christmas time. Finder research from 2022 revealed that almost half (49%) of Australians racked up Christmas debt, with 36% taking up to five months to pay it all off.

Credit cards can charge very high interest rates, too. Whenever possible, use a debit card (or cash) instead of a credit card for your Christmas spending to avoid accruing credit card debt.

9. Avoid Buy Now, Pay Later (BNPL)

As many as 9% of Aussies relied on BNPL services like Afterpay for last year’s Christmas shopping. While these services aren’t all that bad if used properly, they can carry late fees and result in black marks on your credit report if you miss any repayments.

BNPL schemes can also easily lead to overspending. If you choose to use BNPL, make sure you understand the terms and are confident you can make the repayments on time. You should also be aware of how these products can impact future loan applications.

10. Avoid high-cost debts like payday loans

Buy now, pay later can sometimes be helpful, but the same is rarely said of high-cost debts like payday (short-term) loans and wage advances. These products can lead to a cycle of debt that’s difficult to escape due to their high fees and interest charges. 

Avoid these types of loans at all costs if possible, and look for more sustainable ways to finance your holiday spending.

11. Shop the sales (Black Friday, Cyber Monday etc.)

Black Friday and Cyber Monday are two of the biggest sales events of the year, taking place on the last Friday and Monday of November. In 2022, over $6.2 billion was spent during these four days alone!

Take advantage of sales events such as these to get the best deals on gifts and holiday items in the lead-up to Christmas. According to Roy Morgan, the average discount on offer is 22%, and around a quarter (25%) of Christmas shopping is completed in Black Friday week alone.

12. Use your loyalty programs and reward points

Aussies have billions of dollars worth of points saved up from the likes of Frequent Flyer and store loyalty programs. NAB’s data reveals a 120% jump in people choosing to cash in their points for a gift card since pre-Christmas 2022.

If you have accumulated points or rewards from loyalty programs, Christmas is one of the best times to use them. These programs can provide significant savings on your holiday shopping.

13. Combine food budgets with family (or friends)

If you’re hosting Christmas lunch with relatives or are just having a boozy get-together with mates, make sure you ask if everyone is happy to chip some cash in or split the bill for the total food and drink cost. You can also ask everyone to bring a plate, bottle of wine, or even some Christmas crackers for the table.

This approach can reduce the financial burden on any one person. By using bill-splitting apps like Beem or Splitwise, you can also avoid any inevitable arguments over who owes who and how much.

14. Switch to cheaper brands and shop around for specials

Be open to switching to more affordable brands and shopping around for specials. There are often great deals to be had if you’re willing to look for them.

Websites like CHOICE are great resources for comparing products from different brands to find which ones represent better value.

15. Stock up on fuel beforehand

If you’re taking a trip before or after Christmas Day, you’d be well advised to stock up on a few jerry cans worth of fuel beforehand. Fuel prices around Christmas generally tend to be higher most years due to increased demand, and this year is no exception. 

In September, with average petrol prices more than $2 per litre nationwide, National Roads and Motorists Association spokesperson Peter Khoury warned Aussies that prices would get even higher by Christmas.

“Oil-producing nations have made it clear they have no intention of increasing production between now and Christmas,” Khoury told The New Daily.

“It doesn’t bode well for families heading into Christmas.”

16. Stay home instead of travelling

According to NAB, almost two in three (65%) of Aussies with intentions to travel over the next 12 months have had to cancel or postpone their plans due to cost, with 66% believing travel has become too expensive.

They’re not wrong to be wary, as travelling during the holiday season is usually expensive. If it’s possible, consider staying home and enjoying local festivities instead.

If you must travel or have already made plans to, see some of the following articles we’ve written to help cut down on costs. 

Since holidays are so expensive, there are lots of opportunities for savings!

17. Limit decorations and gift wrapping

While decorations and gift wrapping are a beloved part of the holiday season, they can also be expensive. Instead, consider using fabrics such as tea towels, bags, recycled paper and homemade name tags for your presents. Or just dump it all in a sack and hand it out like a lazy Santa!

18. Get smart buying online

Online shopping can offer convenience and savings, but it’s essential to be smart about it. Many retailers offer a 10% –20% discount for first-time customers who sign up online, and plugins like Honey can find you the best available discount at the checkout.

Look for free shipping options and be wary of online scams, too.

19. Watch out for shipping costs

Shipping costs can add up quickly when shopping online. Look for free shipping options, or consider shopping in-store to avoid these fees. Alternatively, many stores now offer click-and-collect for free, offering you the best of both worlds.

20. Sell some unwanted items

If you’re struggling to save money in the lead-up to Christmas or have left it too late to snag the best deals, you could still make some extra money by selling things around the house!  According to Gumtree’s Circular Economy Report for 2022, as many as 86% of Australians have unwanted or unused items lying around the house, which could be worth as much as $7,000!

Take the opportunity to declutter your home and make some extra cash.


Start saving all year round

While the best time to start saving for Christmas is the day after, it’s never too late. No matter the year or how close to Christmas you’re reading this, the 20 tips we’ve mentioned above can all make a difference to your Christmas budget.  

You can also check out our latest articles for a whole host of fantastic savings guides, such as:

And much more!

Ultimately, if you find yourself stretched financially this Christmas, don’t fret. We can help you out thanks to the manageable fixed-term repayments on our loans. Whether it’s a Debt Consolidation Loan to help manage some post-Christmas debts or a Holiday Loan to fund that dream getaway with the family, Jac’s got your back this Christmas.


The information on this website is for general information only. It should not be considered professional advice from the website owner - Jacaranda Finance. Jacaranda Finance is not a financial adviser, and the content on this page does not consider your objectives, financial situation or needs. You should consider seeking independent legal, financial, taxation or other advice to check how the website information relates to your unique circumstances.

Jacaranda Finance is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly by the use of this website.

Written by - William Jolly

Content Manager
William is the Content Manager at Jacaranda Finance. He has worked as both a journalist and a media advisor at some of Australia's biggest financial comparison sites such as Canstar, Compare the Market and Savings.com.au, and is passionate about helping Australians find the right money solution for them.

You can get in touch with William via williamj@jacarandafinance.com.au.
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