Can’t afford Christmas this year? A new credit report shows that lots of Kiwis are in the same boat as you. We chat to Kiwi women for their tips on how to have a cheap Christmas, without losing the festive joy.
If you went by office chat, social media, or all the fruit-mince pies being scanned in supermarket checkouts, it might seem like business as usual for Kiwis in the lead-up to Christmas – lots of present shopping, lots of socialising, and decorating the Christmas tree just so.
But if you’re feeling the financial pinch more than ever right now, feeling overstretched, and feeling it’s hard to match the festive spirit around you – well, it’s definitely not just you. In fact, Centrix’s November Credit Indicator report released this week tells quite the Christmas story: that a LOT of Kiwis are struggling massively this festive season, especially given the continued cost-of-living crisis.
The Centrix (Credit Bureau of New Zealand) report includes data from November for credit enquiries and credit defaults because that info came in every day, while the arrears data speak to the end of October.
Consumer arrears – where people have fallen behind in payments – are up 3.1% year-on-year; including on mortgage payments, credit cards, energy payments, telecommunications payments, and vehicle-loan payments. A whopping 461,000 people – 12% of New Zealanders who actively use credit – were in arrears as at the end of October (up 3000 month-on-month). Credit-card arrears rose slightly to 4.3%. Meanwhile, mortgage arrears rose slightly, affecting 21,300 home loans (a 10% increase year-on-year).
“We expect both consumer and mortgage arrears to jump again in a similar way for Kiwi consumers [as last year] over the summer months due to increased activity and spending that puts pressure on the household budget,” Monika Lacey, Centrix’s Chief Operating Officer, tells me.
“Consumer credit defaults are also up 37% over the last year compared to the prior year, as the impact of the cost-of-living crisis continues to take hold.” A default is where a payment over $125 is overdue by at least 30 days, and the credit provider has tried to recover the money.
As all this suggests, many Kiwis are really going through it. According to the report, “the number of financial hardship cases – an indication of personal financial strife – are up by 20% year-on-year, although the rate of growth is subsiding. Of these cases, 46% relate to mortgage payment difficulties, 30% to credit card debt, and 15% to personal loan repayments, with the highest rate of financial hardship affecting those aged between 35 and 39 years old.” The report doesn’t speculate as to why it’s that age group, but hey, young kids and big mortgages are expensive.
So too is the festive season, right? “In the run-up to Christmas and peak spending season, consumer credit demand is on the rise,” the report says. Credit-card applications are up 23% year-on-year. Recent weeks have seen an increased demand for personal loans, which include Buy Now Pay Later (BNPL) services where you can buy goods or services but pay later in interest-free instalments. More people are getting credit cards, loans, and BNPL accounts approved. (FYI, approximately 900,000 Kiwis have BNPL accounts and approximately 500,000 have personal loans.)
The report urges caution with spending in the festive season, saying it’s important to take financial stock as the year ends. “For those who can’t afford a financial advisor,” Monika tells me, “we recommend creating and sticking to a budget, doing your financial due diligence and using digital tools to take stock of your finances where possible. The likes of MoneyTalks provide free, confidential budgeting advice, and Centrix offers a complementary personal credit report to help consumers understand their credit scores and how they can improve these.”
Tips To Have A Cheap & Cheerful Christmas
Whatever your situation, if you’re worried about how to afford the festive season without denting the holiday spirit, the Kiwi women below share their plans, ideas and tips for a cheap(er) and cheerful Christmas.
Cassie
“I freeze my credit card in a block of ice so I have to wait for it to defrost – that stops impulse purchases. I op-shop for clothes for the niblings [nieces and nephews], offering mending or altering if needed. I have a crafting evening with friends to make gifts with our combined supplies. I make wrapping paper with potato prints: take big pieces of butchers’ brown paper, cut a small potato in half, carve something like stars, dip the potato design in paint, and stamp the paper! I also go to local vege markets to buy cheap fruit in bulk to make jam in pretty jars I’ve collected over the year.”
Emily
“The adults do Secret Santa. Everyone wraps a book – new or secondhand – with an anonymous note saying why they liked or loathed it. When it’s your turn, you can open a wrapped book or steal someone else’s book. The ‘loathe’ option is perfect for that simply awful or funny op-shop book – it heightens the fun and competition. No one in my family likes shopping, so for the niblings we have a Google doc where parents write what their kid would like (for under $20) and the url, so it’s easy to buy presents online and we don’t overspend in desperation.”
Airini
“I don’t do Christmas at my house because I celebrate Yule in the winter, but we have a family Christmas with my parents and one or both siblings. We don’t buy presents for adults – just books for the nieces, and cash for my sons. I’ve never bought a Christmas tree in my life; we cut a branch off a pine or macrocarpa. We save a lot by making homebrew and being mostly sober. My brother catches trout for Christmas dinner.”
Laura
“Hubby, me and our adult kids have done Secret Santa since the eldest was about 17 and now we’ve incorporated their partners, so we each buy only one gift. This year we collectively decided to make it a lower dollar value, and each couple gets another couple to buy for. It feels considerate for everyone to think about not just their own budgets, but the budgets of their siblings – including the impacts of interest rates, the cost of living etc. We’re refocusing Christmas on being fun and thoughtful, rather than about expensive gifts.”
Jasmine
“With my three siblings, we get presents for our OWN kids, FROM their aunts and uncles. That way it’s something we know our kids want.”
Mary
“Our situation is one income and not a lot of money. My adult kids get some treat food I buy during the months before Christmas. My 13-year-old gets more, as the other kids did when they were younger. These gifts can be new or second-hand and usually include stuff he needs (PJs, togs, or underwear) and a couple of things he might enjoy. For the Christmas meal, my hubby gets a ham, I do trifle and roast veg, mum does pav and some veggies, my son does turkey, and we share the cost of the stuffing. I’ve had a fake tree for years and an advent calendar that’s reusable. I make presents for my mum and other kids. I usually make things for my kid’s teacher – last year it was a shark keyring as the class animal is a shark. I always make heartfelt cards for the school’s office staff, principal, deputy principals, and caretaker, plus my GP and my pharmacy.”
Edith
“In our family, we re-use wrapping paper, swapping paper each year, and choosing the right size from pre-cut bits. This also means remembering past presents that came from them. We see who can unwrap presents without tearing the paper, so it becomes a fun game. Also, we’ve stopped being shy about asking and telling each other what things we actually need. It’s much nicer to give something that’s actually wanted, or occasionally a pricier item that is a combined present from lots of us. We all bought my sister a really nice coat last year that will last her for years and help her feel loved when she wears it.”
Jessie
“I do savings challenges all year – sometimes I specify amounts, and at other times I just put in what I can – and that’s my Christmas budget. I managed to save just over $600 this year. That doesn’t include food, so it’s a lot of money, but man, it goes quickly. My adult daughter wants a household hamper and as we’re in different cities, I get it sent. Also, from October, I start buying one item a week for the foodbank drive in December.”
Other Easy Ideas:
Other people are painting canvases for gifts, selling unwanted items like toys and books to get the money to buy gifts, gifting vouchers for ‘time’ (for instance, a day of babysitting), making ornaments for the tree, keeping Christmas dinner simple and ditching desserts like trifle and pavlova, only giving presents to children, and re-gifting (if the original giver isn’t there!). I always make fruit-mince pies to give away, and absolutely no one could ever mistake them for bought ones (but they taste good, honest!).
Merry Christmas.
