How Northlanders can cut costs this Christmas as inflation bites

Christmas shopping is set to cost more than ever this year with rising inflation. Photo / 123RF

As inflation pushes the cost of Christmas up, some Northlanders are desperate to cut the cost of festivities.

Dianne Harris, Whangārei Anglican Care Centre financial mentor co-ordinator, said some of her clients would be missing out this year.

“The clients we are seeing are obviously finding the thought of Christmas quite challenging, but they are prepared to go without to make Christmas work.”

She offered a number of suggestions for people to cut spending over the festive season, including putting a limit on the cost of presents and gifting homemade items.

For Christmas dinners, Harris recommended pot luck and having guests bring their own drinks.

She said some of her clients have planned in advance and put aside money every week during the year for Christmas spending.

“Some of the clients (especially those with regular incomes) have taken on board the suggestion of looking around and buying their gifts when specials are offered throughout the year, so that the pressure of Christmas doesn’t become overwhelming.”

Harris said she and her fellow financial mentors believed people were starting to make better choices.

“Last year some of our clients were noticeably more aware of the need to be organised and as the year has progressed they are trying to curtail their spending. At the beginning of last year, we didn’t see the usual number of clients needing help for overspending.”

However, they have also noticed an increase in people using ‘buy now, pay later’ schemes, Harris said.

With increasing inflation, some clients were more aware of the need to look at spending, but some were ignoring increased costs and buying as usual, she added.

Harris advised that while there was nothing people could do about increasing prices, priorities and planning were important.

One of her clients was writing a list of presents they needed to buy, putting down a price limit and ticking them as they went to avoid overspending.

Dianne Harris, Whangarei Anglican Care Centre financial mentor co-ordinator. Photo / Michael Cunningham

A survey by financial information website Banked showed 60 per cent of New Zealanders said they were stressed about Christmas expenditure.

Nearly half described themselves as “a little stressed”, and 14 per cent as “very stressed”. Women were more stressed than men, with 70 per cent reporting some amount of stress over Christmas spending.

The survey, of 1020 people, showed they planned to spend an average of $623 on gifts alone this year.

On average, men planned to spend more than women – $712 rather than $566.

“With rocketing inflation and a cost of living crisis to contend with, lots of New Zealanders are really feeling the pinch this Christmas,” Kevin McHugh, head of publishing at Banked, said.

“Many will be worrying about their personal finances when they should be able to wind down and appreciate some well-earned time off with friends and loved ones.”

McHugh’s top ways to save over Christmas were through group gifting or Secret Santas, setting a budget and not feeling obliged to spend beyond your means.

The survey showed more than half (55.6 per cent) of people would use money they have saved to pay for Christmas. Just over 20 per cent would use credit cards, and 16.6 per cent ‘buy now, pay later’ schemes.

A Retirement Commission found 58 per cent of New Zealanders could not cover an unexpected expense equating to one month’s income, and 33 per cent would have to borrow money within three months if their income dropped by a third.

The AA has warned that the increased cost of petrol – around 50 cents more than last summer – meant road trips would be significantly more expensive than last year.

AA Smartfuel co-founder Ian Sutcliffe said people should save their fuel discounts rather than use them every time, as this would result in paying less in the long run.

He also recommended people fill up on Wednesdays, when 10 cent discounts were available at BP and GAS petrol stations.