Aussies begin New Year bogged down in debt from Christmas spending

Christmas may be behind us for another year but according to a new study debt from the piles of presents and the delicious festive feast is still hanging over the heads of many Aussies.

According comparison site Finder a whopping 37 per cent of people in the Land Down Under are currently repaying their Christmas debt with the majority expected to take until the end of February to build back those savings.

Meanwhile, for others the finances will have to be stretched further with 25 per cent of people taking up to five months to pay the money back. And it’s not just a little amount Aussies still owe with Finder data revealing an estimated $28 million was spent on credit cards in December alone.

Previous Finder data revealed that the average Australian household spend $969 at Christmas, with travelling making up the bulk of that expenditure with Aussies spending around $471 each on festive getaways.

Gifts were found to be the biggest expense with Aussies admitting to spending an average of $368 each on presents, which adds up to around $7.5 billion nationwide. While charitable donations accounted for $41 per person and decorations for the big day set people back around $40 each year on average.

According to the most recent Finder research, Victorians will take the longest to pay off their debt (10.5 weeks), while Western Australians will be the quickest to pay down their festive spend (5.5 weeks).

However, according to Kate Browne, personal finance expert at Finder, there is no need to fret, as long as you stick to a budget for the next few months. She recommended reigning in spending now so you aren’t in a worse financial position that you may already be in.

“Make a budget to help keep within your spending limit,” Browne said. Work out which debts cost you the most in fees and charges and work to pay them off or move them to a cheaper facility as soon as possible.”

Browne also said for those with unmanageable credit card debt, moving the outstanding balance to a zero interest credit card deal is a smart idea and could help you pay off the debt quicker. She explained if you have debt across multiple cards or loans, you would be paying interest under multiple rates and this can be costly.

“Balance transfer credit cards allow you to consolidate your debts into one place,” Browne said.

“They offer a low or 0 per cent interest rate on any existing debts you transfer from another account or card. This can help cardholders to tackle their existing debt sooner and save big bucks on interest in the long run.”

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.