With more than $50 billion expected to be spent in retail stores over the Christmas trading period in Australia1, research by AMP suggests more Aussies are likely to feel the pinch financially on the back of overspending, impulse purchases, as well as a lack of budgeting.
The AMP study, which looked at responses from around 1,000 people revealed that 69% suffer from ‘post-purchase blues’ after forking out on various types of products and services.
We check out the stats, as well as some of the steps you might want to put in place to make your money go further this festive season.
A breakdown of the research
- 56% said they had no idea how much they spent on Christmas presents last year.
- 71% admitted to spending more than what they could afford.
- 88% admitted to making impulse purchases, with fashion and electronics topping the list.
- Those more likely to feel remorse were aged 18 to 24.
- Women were more likely to suffer from post-purchase blues compared to men, with 79% of women compared to 60% of men saying they felt some regret following Christmas purchases.
- 35% of Aussies said post-purchase blues led them to hide purchases from family members or their other half.
Insights from AMP
Michael Christofides, Director of Retail Solutions at AMP Bank, said with many people not knowing how much they spent on gifts last year, impulse habits were potentially setting Aussies on a course for more overspending this year.
“Christmas is about gift giving and celebration and it’s very easy to get caught up in the moment,” he said, adding people might find the perfect gift that’s over their budget, but still buy it anyway.
“More than half of us feel excited when we make an impulse purchase, but the initial euphoria seems short-lived for most, as 70% of people regret their purchases.”
Ways to avoid the post-purchase blues
Create a Christmas budget
If you haven’t already, there’s still some time to create a Christmas budget that takes into account gifts, entertainment, catering and maybe a bit of travel.
Remember to also allow for festive season parties, events and social occasions, and the extra costs these might entail, such as taxis and incidental gifts.
Also, if you happen to have a partner, it’s probably a good idea to work on this budget together so you’re both on the same page and can work toward a compromise where one might be needed.
Use cash and try to leave the credit cards at home
Using money you’ve earned rather than putting things on credit could keep you from overspending. Plus, credit cards are typically more expensive than other forms of borrowing.
With that in mind, try to withdraw the amount you’ve got to spend before your shopping trip so you’re more easily able to keep track of how much you’ve spent and when your money has run out.
Consider cost-effective gift giving
Gift-giving can be pricey, particularly if you’re a part of a big family where everyone wants a present.
Some strategies you could look to adopt to keep spending under control include agreeing on a spending cap per person, or using a system where everyone buys for just one person.
Share the costs
Eating a special meal with friends and relatives is a Christmas ritual for many people, but it can be an expensive one, so consider ways you can make it more affordable such as rotating the hosting duties, buying items in bulk or asking guests to bring some nibbles, a signature dish or dessert.
Where to go for more help
Christofides said the good news is there’s a range of technologies out there to help Australians take control of their finances, and the emergence of artificial intelligence provides additional help.
He pointed to AMP’s recently launched Bett3r account, which helps you automatically pay bills, save, and know what's left to spend, as a good example.
Another way you might be able to track your money more easily is with My AMP, which gives you the ability to view all of your AMP and non-AMP accounts in one place, and at the same time categorise your transactions, so you can see where your money is going.
In the meantime, remember Christmas is about your presence more than it’s about your presents, so keep that in mind and have a happy holiday.