Press Release – Commission for Financial Literacy and Retirement I
The message to spend carefully and avoid debt seems to be getting through, with two-thirds of Kiwis planning to spend no more on the festive season this year than last year, according to new research.Savvy Kiwis avoiding debt this Christmas
The message to spend carefully and avoid debt seems to be getting through, with two-thirds of Kiwis planning to spend no more on the festive season this year than last year, according to new research.
Research released today by Sorted polled New Zealanders on their spending intentions for Christmas.
The survey found 68% of people intended to spend the same or less on gifts, holidays, travel, food and alcohol than they did last Christmas, and only 24% intended to spend more.
Retirement Commissioner Diana Crossan says it’s encouraging that many Kiwis are keen to keep a lid on their Christmas spending and are less willing to go into debt.
“People tend to overspend at Christmas and get into debt to pay for it. Christmas is a time of generosity, giving and good times with family and friends. But, this year it looks like people are planning to be more careful about how they spend their money.
“No-one wants those close to them to get into dumb debt for the sake of a lavish dinner, expensive gifts or a holiday. The best idea is to design your own Christmas money plan, including what you’re going to spend on gifts and for whom, and ask everyone to pitch in for meals. Then, share your plan with your friends and family so everyone has the same expectations,” she says.
When it came to pulling out the credit card to pay for Christmas expenses, only a third of those surveyed thought it would be necessary.
“Our survey found 55% of those surveyed weren’t intending to use their credit card, get an overdraft, a hire purchase or a personal loan, compared to 31% who thought it would be needed.
“This is great news, and we really hope that as much as it’s possible, Kiwis won’t need to rely on credit and if they do they’re able to pay it off within the interest-free period.
“Leaving the credit card at home and paying with cash helps avoid the painful New Year debt hangover that can take months to pay off,” she says.
Ms Crossan says rising food and energy prices and job losses have hit many Kiwis hard this year but despite this the majority are working hard to stay out of debt.
“We are hearing from budget services around the country that people are keener than ever to get ahead and start 2012 on the right foot. Getting through Christmas debt-free is an important step,” she says.
Sorted provides free, independent and impartial information to help New Zealanders make informed financial decisions throughout life. It’s best known for its website sorted.org.nz and is provided by the Commission for Financial Literacy and Retirement Income (formerly the Retirement Commission).