Nearly half of New Zealanders are planning to cut back their spending this Christmas amid cost of living pressures, according to two separate surveys. 

A Westpac NZ survey of 1110 customers found 44 per cent expect to spend less money this festive season compared with last year. 

Just 16 per cent said they expect to spend more, while 40 per cent said they will spend the same. 

The hospitality and tourism sector looks set to suffer from Kiwis’ belt-tightening as 47 per cent said they would cut spending on holiday accommodation and 45 per cent would cut back on travel costs. 

Forty-three per cent said they would cut back on both gifts and dining out, while 61 per cent are planning to spend less on decorations. 

Groceries are the only key item where more people said they expect to increase their spending (33 per cent) rather than decrease (25 per cent) compared to last summer. 

This is largely influenced by higher food costs, with annual food prices 8 per cent higher in the year to September 2023, according to Stats NZ. Grocery prices were up 10.7 per cent when compared with September 2022. 

Meanwhile, a survey from price comparison website PriceSpy found 44 per cent of people would take a more frugal approach to Christmas by spending less, while 7 per cent said they wouldn’t spend any money on Christmas at all. 

An overwhelming 94 per cent of the 500 Kiwis surveyed said they had felt the felt the impact of the cost of living crisis. 

“The past few years have been financially challenging for many. Despite recent improvements in inflation rates, the lingering effects of previous price increases continue to influence consumer spending, leading to noticeable cutbacks this Christmas amongst consumers,” said Liisa Matinvesi-Bassett, New Zealand country manager for PriceSpy. 

The consumers price index – a measure of inflation for New Zealand households – rose 5.6 per cent in the 12 months to September 2023, but is cooling off from the 7.2 per cent observed in the year to December 2022.   

Helen Ryder, Westpac NZ’s acting general manager of consumer banking and wealth, said while the end of year can be financially stressful, there were still ways to have fun. 

“The holidays are primarily about getting together with family and friends, celebrating and reconnecting. There are many ways for it to be fun without being overly expensive or excessive,” she said. 

“The first step for anyone worried about their finances should be to draw up a spending plan for the holidays and stick to it. 

Ryder said drawing up a budget including food, travel and gift-buying costs can help keep you on track. 

“Make sure your budget is realistic, make sure the whole family is engaged with it, so everyone’s expectations are set, and then make a plan to stick to it,” she said. 

Ryder said it was encouraging that nearly three-quarters of respondents are planning to pay for their summer spending from within their normal everyday spending. 

Just 15 per cent are intending to take on extra debt in the form of credit card spending or overdrafts. 

A separate survey last week of more than 1000 New Zealanders by Banked found 34 per cent of people will use a credit card as the main way they will pay for Christmas — a 14 per cent increase from 2022.   

Tip to avoid a holiday spending hangover: 

• Don’t buy more groceries than you need. How much Christmas ham gets thrown away in the new year? 
• Budget for the essentials first, like food and travel, before allocating leftover spending money on items like gifts and decorations. 
• Consider alternative gifting options like a “secret Santa” arrangement or pre-loved presents. 
• Before paying with credit, see if you can reduce costs somewhere or use your savings, to reduce debt to pay back in the new year. 
• Talk to friends and family before going gift shopping to discuss whether you are going to do presents, and if so, whether you should set a price limit. 
• If you are buying presents, try and get a steer to make sure they are things they need, rather than just things they want. 
• Consider sustainable gifts that are meaningful, long-lasting and environmentally-friendly.