Millions Ring in the New Year with Christmas Debt Stress

As the holiday decorations come down, an estimated 7.7 million Australians, or 38%, are facing the harsh reality of Christmas debt.

New research from comparison website Finder shows 15% of Aussies expect to take between 1 to 5 months to settle their holiday season expenses, while an additional 5% anticipate a more extended period of 6 to 11 months.

Another 3%, equivalent to over 600,000 people, admit that it will take them a year or more to pay off their festive spending.

On a positive note, 1 in 6 (16%) Australians express confidence in clearing their debt in less than a month.

Australians are more stressed about finances than they were during the pandemic. Credit: supplied.
Australians are more stressed about finances than they were during the pandemic. Credit: supplied.

It comes after a report found millions of people were planning a substantial spending spree on Boxing Day sales, with a whopping $2 billion expected to be spent during the post-Christmas sales.

Despite the ongoing cost-of-living crisis, 32% of Australians, equivalent to approximately 6.5 million people, intended to take advantage of discounted retail.

Amy Bradney-George, credit card expert at Finder, emphasizes that the joy of the season often comes with a substantial financial burden.

“Many Australians experience significant financial stress over the holiday period. The pressure of gift giving and festive activities can often lead to overspending and an increased reliance on credit,” said Bradney-George.

The research reveals that younger generations, particularly Gen Z and millennials, leaned on credit the most to spread holiday cheer. Gen Z took the lead, with 55% admitting to acquiring debt, followed by 43% of millennials.

Bradney-George advises those dealing with Christmas debt to create a post-holiday budget and identify areas where spending can be trimmed.

She recommends avoiding non-essential expenses until the Christmas debt is settled.

“Create a detailed repayment plan, and prioritize paying off high-interest debt first until it’s all cleared. Set little goals along the way, so you’re able to track your progress over time and stay motivated – just like you might set them for your health and fitness.”

For those struggling with credit card debt, Bradney-George suggests considering a balance transfer.

“A balance transfer card can give you some breathing room by offering 0% interest on the balance you move to the new card, sometimes for up to 32 months,” she said.

“If you’re facing significant challenges, you can also speak to a financial counselor for free by calling the National Debt Helpline at 1800 007 007.”

Reporter

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