Christmas will be a financial nightmare for half of Australian families, according to a new study which alarms but does not surprise the nation’s peak body for financial counsellors.
New research conducted by Roy Morgan, released by the Salvation Army, also reveals that 2.4 million Australians are concerned about how they will pay for Christmas. Almost two million say the festive season will leave them in worrying debt.
“Financial counsellors are very concerned, but sadly we’re not surprised,” says Fiona Guthrie, CEO of Financial Counselling Australia.
The study comes just days after the Australian Retailers Association released research, also conducted by Roy Morgan, showing that retailers expect shoppers to spend more than $48.1 billion in stores this Christmas.
“Christmas is such an important part of our culture that people will go further into debt to make sure that they have Christmas, and then they will worry about it afterwards,” Guthrie says.
“It’s about trying to have the sort of Christmas that you imagine: having your family around, with lots of food and lots of presents.”
Half a million Australian children under 10 are unlikely to receive any presents this Christmas, according to the Salvos study.
“It reminds us how difficult circumstances are for some people, when people tell us that they’re having to sell things just to scrape up enough money for Christmas, and others say that some children in their household will not even get one present this Christmas,” says Major Paul Moulds of the Salvation Army.
The growing divide between rich and poor continues at the table.
About 45% of Australians admit they buy too much food at Christmas, a figure which disturbs Major Moulds.
“When you compare that to our surveys that show that nearly half of our clients are forced to skip meals due to extreme financial hardship, the contrast is astounding and disturbing,” he says.
More and more Australians are worried about money, to the point they are losing sleep, Guthrie says.
January is the peak time for calls to financial counsellors, as the spending hangover sets in and families prepare for the expensive back-to-school season.
“As children go back to school and everyone goes back to work, there will be a big spike in inquiries,” she says.
Guthrie says it is important to remember that many Australians are experiencing financial stress through no fault of their own.
“There are people who have really low incomes, and I think it’s important that we start recognising this in our public discourse.
“Often we talk about financial stress as if it is someone’s fault … it’s more often the result of unemployment, illness, relationship breakdown or poverty.”
She urged people to imagine themselves in January having to deal with Christmas debt, and to call 1800 007 007 and speak to a financial counsellor if they are experiencing financial stress.
Tips to avoid financial stress
- Suggest a family Secret Santa instead of exchanging multiple gifts
- Write a shopping list with a price guide before you start
- Consider making, rather than buying, gifts
- Agree to exchange gifts in January and shop in post-Christmas sales
- Call a financial counsellor on 1800 007 007 and discuss your financial situation