Every year we hear numerous reports around Christmas time about Australian’s spending record amounts of money, and whilst this is great for retailers and big business there is also a dark side to this Christmas spending.
According to research conducted by the Australian Retailers Association (ARA) each person over the age of 14 spends an average of $2,500 in the six weeks leading up to Christmas. Last year as a country we spent $45 billion on Christmas and the related festivities.
This is a massive amount of money per person, let alone per household, and I assume a portion of these people are finding themselves in serious financial trouble soon after the holiday period. In fact, research conducted by Mozo at the start of 2015 found that four in ten Australian’s were still feeling the pain of Christmas spending in February, and 36% of Australians either have higher credit card debts or lower savings balances as a result of their Christmas spend last year.
Perhaps the most shocking statistics from this research is that one in five Australians feel the financial consequences of Christmas were so severe they are now struggling to pay basic regular household expenses, or have to cut back on spending, or both.
It is not uncommon for Australian’s to get themselves into financial trouble during the Christmas period. Having a look at the statistics provided below by the Australian Financial Security Authority (AFSA), it becomes apparent a larger number of people are seeking personal insolvency solutions, in the quarter straight after Christmas.
I would not be surprised to see a similar trend this year, as Australian shoppers are forecast to spend $46.7 billion according to the ARA. Whilst a modest increase compared to other years, this is still a significant enough increase to place further pressure on Australian families.
I am concerned that as a society we are now spending so much on Christmas, and are losing sight of things that really matter in our life. I firmly believe Christmas should not be a time of financial stress, it should be a time of joy and happiness. Have we as a society gone too far with what we spend during Christmas?
Rasad Merchant CPA
Strategy and Business Development Manager & Secretary of the Personal Insolvency Professionals Association (PIPA)
Rasad brings over 8 years’ experience working in the insolvency sector to Debt Cutter, where he is dedicated to achieving peak business performance. With a background as both a trusted business advisor, and as a business owner, Rasad uses his foresight to strategically manage business growth and opportunities.