Kiwi households rein in Christmas spending as costs bite

New Zealanders are tightening their belts this Christmas, with many scaling back on gifts, dining out and travel as everyday expenses take priority, according to a new Westpac survey.

Westpac surveyed nearly 1,100 of its customers and found nearly three-quarters (73%) were either extremely or moderately concerned about the cost of living, a level little changed from last year. 

Recent research echoes these findings, with Perceptive’s October Mind & Matters report showing happiness and optimism slipping as higher food, housing and energy costs squeeze household budgets, while a nationwide MYOB poll points to cautious optimism, with 35% of adults expecting to feel financially better off within a year even as nearly two-thirds report some level of financial stress heading into Christmas.

"This year has been tough for many New Zealanders, with prices continuing to creep higher despite inflation coming off its highs," said Helen Ryder (pictured), Westpac NZ general manager of consumer banking & wealth, in a media release.

Only 15% of respondents expected to spend more than last year, while 42% expected to spend less over the festive period.

Non-essentials and travel first on the chopping block

Among those planning to cut back, non-essential spending is bearing the brunt.

Nine out of ten (90%) of those who planned to spend less were trimming costs on discretionary items such as dining out, shopping and entertainment.

Holiday-related spending is also under pressure. The survey shows 39% of holiday travellers – those who travelled last year or plan to travel this year – were cutting back, while 46% of those who used holiday accommodation were planning to spend less.

Planning gaps raise risk of festive ‘debt hangover’

Despite high levels of concern, many New Zealanders are heading into the holidays without a clear spending plan.

Just 27% of those surveyed had a holiday budget, while 40% had not done any financial planning at all.

"Taking some action now to plan your spending can help avoid a cash crunch or debt hangover down the track," Ryder said. "To reduce financial stress, we recommend sitting down as a family and putting some time into planning out your summer spending and then sticking to your plan."

Westpac’s tips for managing Christmas costs

Westpac has outlined several practical steps households can take to keep festive spending under control and reduce the risk of starting 2026 in the red:

• Use a budget calculator to know your limit and then stick to it.
• Budget for the essentials first, like food and travel, before allocating leftover spending money on items like gifts and decorations.
• Talk to friends and family before going gift shopping to discuss whether you are doing presents, and if so, whether you should set a price limit.
• Make a gift list and check it twice to avoid impulse buys.
• Think about grocery shopping earlier rather than later as often items get more expensive closer to Christmas.
• Before paying with credit, see if you can reduce costs or use your savings, to reduce the amount of debt that needs to be paid back in the new year.

Stay informed with the latest housing market trends and mortgage insights — subscribe to our free daily newsletter.