Despite financial pressures, most Kiwis have paid off their Christmas spending

By Ange Dunn

As a follow-up to our recent Mind & Matters Talking Points report on how New Zealanders planned to pay for Christmas and New Year's, I thought it would be interesting to circle back on how Kiwis are going a few months post-holiday. Given today's cost of living, recession and financial pressures, I was particularly interested to know if Kiwi spending intentions matched reality and how they were tracking with paying off their debts.

Many New Zealanders used credit more than they planned to?

To recap, our pre-Christmas Mind & Matters survey found New Zealanders planned to mostly use savings or cash to pay for Christmas and New Year's (50% and 43% respectively). The main two expenses we planned to spend on were food and drink, and gifts.

Three months later in March, we surveyed New Zealanders again using the Perceptive Omnibus to see what they had to say about their Christmas and New Year's spending.? For the most part, New Zealanders spent what they intended or slightly more across all categories: Gifts, Food & Drinks, Travel and Events.

But where the data gets more interesting is how New Zealanders paid for Christmas and New Year's.

While 80% of us spent on food and drinks and 72% on Gifts, more Kiwis used credit to pay for their Christmas and New Year's than they initially planned to. Pre-Christmas, 32% expected to pay with credit, but our post-Christmas survey saw this number jump to 45%. This coincided with a drop in the proportion of New Zealanders who planned to use savings versus those who actually did (50% vs 41%).

Middle-aged New Zealanders borrowed the most?

Our pre-Christmas survey found that borrowing intention was highest in the 30-49 age group. This was echoed in our March survey with the 35-44 and 45-54 age groups borrowing or delaying payment the most (60% and 65% respectively).

Given this age bracket tends to have the highest proportion of New Zealanders with young families, it came as no surprise that we also saw significantly higher borrowing from Kiwis with kids under 17 years (66% vs 58%). This group was also significantly more likely to have spent much more than they intended on gifts (13% vs 9% average). While this group felt both thankful (48%) and happy (55%) about their spending, they were significantly more likely to be experiencing stress about their spending than average (23% vs 18%).?

Young families more likely to spend more than expected?

New Zealanders with kids aged 4-12 years (i.e. those with children in peak Santa years) were significantly more likely to spend more than intended (19% vs 9% average). However, despite their overspending, many feel proud (27%), confident (40%), thankful (58%) and happy (63%) when they think back on their holiday purchases. Moreover, while 42% of this group paid for the Christmas and New Year holiday period on credit card, this was actually below the national average (45%). They were also significantly more likely to use savings gathered specifically for Christmas (37% vs 23% average) and store cards (14% vs 6% average), which indicates this group had strategies in place to manage their holiday spending and finances.?

Unsurprisingly, the bulk of this group's purchases were in the gift (83%) and food and drink categories (82%), however, they were also more likely to spend to attend events, festivals and activities over the holiday period (40% vs 22% average).??

Young New Zealanders showed financial savviness

Younger New Zealanders between 18-34 years were significantly more likely to have saved up (53%) or used Afterpay (25%) to cover their Christmas spending. Seventy-nine per cent of those who used Afterpay have paid it off in full while the remaining 21% are still in the process of paying it off but have started.??

More of them are spending on travel than other age cohorts and they are significantly more likely to have spent much more than intended on travel (25% vs 14%) and events (23% vs 11%). However, rather than being stressed about their spending, they are more likely to be happy (63%) thankful (52%) and proud (23%).??

The good news: Most New Zealanders have paid off their Christmas debts?

Despite spending using credit and borrowing more than anticipated, over 80% of New Zealanders have paid off their credit cards, Afterpay, layby and store card debts from Christmas and New Year's.?

What's more, despite the unintentional reliance on credit and borrowing, most New Zealanders felt happy with their spending decisions (51%) as well as thankful (40%).?

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About the author

Ange Dunn – Senior Business Director at Perceptive

Part of Perceptive’s Client Services team, Ange takes the world of data and insights and spins it into gold in the form of actionable strategies for clients. Ange has seen 10 years in the insights field in New Zealand, Australia and the United Kingdom, and has experience working with first- and third-party data as well as major loyalty card programmes. Her experience also extends across numerous industries too, including FMCG, energy, telco, eCommerce, professional services and toys.?Being familiar with both the client and agency side of the insights industry, Ange excels at bringing client projects from ideation to full fruition. At Perceptive, Ange works with our clients to help them harness the full breadth of our capabilities and to create best in class projects and methodologies.