Aussies dipping into savings to service holiday debt burden

Consumer group Savvy has released findings from its Budget Nation 2023 report — which involved a survey of 1,000 Australians — revealing 64 per cent of respondents expect to dip into their savings to pay off Christmas holiday expenses.

Just a quarter said they would draw from their wages, while 14 per cent plan to use credit facilities to relieve their debt burden.

This comes as over half (53 per cent) have expressed plans to develop a budgeting strategy, with 24 per cent of respondents committing to increasing their savings over the course of 2023.

To achieve their budgeting goals, approximately 12 per cent of respondents said they’d leverage software, while just 7 per cent committed to enlisting the services of a financial planner or adviser.

This includes making automated deposits to savings accounts or managed funds (16 per cent).

Meanwhile, less than a quarter (24 per cent) expressed ambitions to generate more income.

This would include increasing funds in a mortgage offset account or investing in shares (12 per cent) or cryptocurrency (4 per cent).

Reflecting on the figures, Savvy spokesperson Adrian Edlington said inflationary pressures and rising interest rates had prompted more Australians to consider options to better manage their finances.

“Over the last couple of years, Australians have had to really pay attention to every dollar that comes in and out of the household, and people are making more responsible choices with their finances as a result,” he said.

“In our last survey, 76 per cent of Australians said they’d only use their savings to fund their Boxing Day purchases if they were buying post-Christmas and 48 per cent said they wouldn’t be making any purchases at all.

“[Only] 7 per cent said they would consolidate debts, which is pleasing to see; reducing debts and the interest paid on them will mean more money for savings and better overall financial health for households.

Edlington concluded: “This could all indicate Australians are beginning to spend only within their means, so they could be better prepared for whatever economic ups and downs may eventuate during 2023.”