The cost-of-living crisis is affecting how Australians plan to celebrate Christmas this year, according to new research from consumer education website CreditSmart. Many are feeling financially stretched, socially pressured, and forced to cut back.

According to the findings, one in three Australians (32%) says they feel more financial stress than this time last year, and the impact on festive spending is significant:

• Two in three (64%) say the cost of living will permanently change how they celebrate Christmas.
• Seven in ten (69%) are planning to reduce their Christmas spending this year compared to last year, signalling one of the biggest cutbacks in festive budgets in recent years.
• One in three Aussies (35%) feel pressured to overspend at Christmas, with this pressure felt most strongly among Gen Z (48%).
• 37% of Australians say they would skip Christmas gifts altogether if it weren’t for social expectations.

CreditSmart spokesperson and CEO of Arca, Elsa Markula, says the data shows Australians are reassessing holiday priorities and becoming more mindful about festive spending.

“We know that Australians are stretched and stressed, and the data shows that many are no longer willing to blow out their budgets just to meet Christmas expectations,” said Markula. “This year we’re seeing a clear shift toward more conscious, pared-back celebrations - and for many households, that change won’t be temporary.”

Gen Z and Millennials are feeling the financial and social pressures most acutely, with younger Australians more likely to overspend due to expectations from friends, family, or social media.

The research highlights that financial strain is affecting not just gifting, but the broader festive season. Rising costs for food, travel, and social events mean many households are choosing smaller gatherings, cutting down their gift lists, or setting spending limits.

Despite this, CreditSmart is urging Australians to stay informed and proactive about their financial health during the high-pressure Christmas period.

“Understanding your financial position early, including checking your credit report and staying on top of commitments, can help people avoid stress and prevent post-Christmas financial hangovers,” Markula said. “The more informed you are, the more empowered you’ll feel heading into the new year.”

The findings form part of CreditSmart’s ongoing mission to educate Australians about credit reporting, financial wellbeing, and the support available from lenders if individuals experience financial difficulty.

CreditSmart is an initiative of Arca, the industry group that represents banks, financial institutions and credit reporting bodies on credit-related matters in Australia.