Cost of living crisis forces millions of Australians to slash Christmas spending

Aussies are slashing their spending as they struggle to pay mortgages, rent and daily expenses like groceries — and it’s having a major effect on Christmas this year.

Household debt pressure, rising costs and financial uncertainty has reshaped festive spending for Aussies this year, new data reveals.

Christmas isn’t cancelled but Australians are feeling the squeeze and are drastically having to adapt the way they spend this holiday season to make it happen.

New data from Afterpay and ANZ revealed Aussies are planning to spend far less this year and are budgeting more ahead of the holiday season, to make ends meet.

Aussies are spending less on Christmas this year.

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Many Aussies are feeling the cost of living pressures, with one in three saying they are feeling anxious about holiday season due to being in financial stress, according to Afterpay and ANZ.

Particularly with high housing costs and mortgage repayments putting pressure on, they desperately need to cut down on their spending and almost one in three plan to give fewer gifts this year.

Those who don’t want to ruin the festive season and turn up without gifts are turning to Afterpay due to the financial stress the extra spending could place on them.

During the 2024 holiday season 3.49 million ANZ shoppers used Afterpay during the holiday season.

They placed 360 orders per minute and spent a total of $1700 on average each.

Millennial and Gen Z shoppers were the most likely to use Afterpay, with Millenials making up almost half of ANZ Afterpay spenders.

Australian families are turning to After Pay to stretch their money further. Picture: NewsWire / Nicholas Eagar

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Aussies are looking to cut down on that figure this festive season, with 44 per cent planning to spend less than last year while two in five want to spend less overall.

At least 40 per cent of shoppers are expected to use buy now pay later to spread out their spend across the month.

For 2025, Australian families are wanting to cut down their Christmas and holiday spending, hoping to spend less than $750 on average each, while one in three say they have set themselves a budget.

A massive 94 per cent of businesses say offering a buy now pay later say it’s “vital” to success of their business during peak season — showing just how desperate Aussies are to still make Christmas happen, without going into debt.

Nearly three quarters (72 per cent) of shoppers plan to purchase items they can enjoy at home including self-care and home comforts.

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