Families juggle tight budgets ahead of Christmas season

With the fast-approaching Christmas and New Year holidays, families want to avoid the not-so-festive red from appearing on the bank statement.

While Black Friday has kicked off the holiday shopping season, unemployment is at its highest level since December 2020, and KiwiSaver withdrawals for financial hardship have reached record highs.

FinCap advisor Jocelyn Kua encouraged families to stick to what they can afford.

“There is quite a bit of pressure around Christmas, those gifts for families or loved ones … when you look for specials, stay within your budget, avoid overspending.

“We don't recommend you to go down to places where you're going to generate new debt going into the New Year, you don't need to break the bank for Christmas.”

Financial wellbeing advocate Victoria Ongolea said cultural expectations and supporting family overseas add another layer of pressure for Pacific families.

"We help with school fees, weddings, and funerals back home while paying our bills here. Balancing these two worlds is expensive, and financial hardships can arise if not managed carefully."

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Payday planning

Christmas Day, Boxing Day, and the start of the New Year falls on Wednesdays and Thursdays this season, which are common paydays for weekly and fortnightly earners.

When this occurs, some employers pay employees on the last working day before the public holiday, so the bank transaction goes through.

Speaking to Nemai Tagicakibau on Pacific Days, Kua warned that this could create a longer payday gap and urged families to plan ahead.

“Make sure those priority payments like your rent, your power, your wifi, your internet, and all those payments go out and that they are paid in time if possible, or even in advance.”

If a bill is not paid on time, Kua said communication is key, and providers have obligations to support clients in setting up affordable payment plans.

“Give them a call, don't let it sit too long. Give these creditors and these utility places a little bit more of an advance warning.

“It’s better you get in touch with them quickly than when you are either gone past a due date or too close to a due date. Get in there early and start to have that really good talanoa with them to work out a very good payment arrangement for you.”

Need help? Families can contact Money Talks on 0800 345 123 or free text 4029 for advice.