Australians cautious around Xmas spending due to rising living costs
New research has revealed that despite Australians planning to increase their Christmas spending in 2025, they remain focused on finding bargains and are exercising financial caution amid rising living costs.
Rising festive budgets
The seventh annual Pureprofile Christmas Report, which surveyed more than 4,600 people across Australia, New Zealand, the UK, USA, and Singapore-including a representative sample of 1,002 Australians-found Australians intend to spend an average of AUD $491 on gifts, an increase from AUD $468 in 2024.
Anticipated spending on festive food and drinks will also rise significantly, from AUD $406 last year to AUD $506-a difference of AUD $100.
Despite these higher budgets, 78% of Australians said they are adjusting their Christmas spending to stretch their budgets, up from 67% last year.
The report highlighted that 38% plan to spend less on gifts overall, while 18% will focus their gift-giving solely on children.
Bargain hunting and changing habits
The popularity of major sale events has continued to increase, with 55% of Australians saying they will wait to do their Christmas shopping during Black Friday and Cyber Monday sales, up from 45% in 2024. For retailers, percentage-off discounts are the most appealing offers for consumers (48%), followed by free shipping (15%).
There is also a shift back towards brick and mortar retailers. In-store shopping has risen slightly to 61%, compared to 59% last year, while online shopping dropped to 38% from 41% in 2024.
Payment trends and financial caution
Debit card usage has grown, now accounting for 56% of purchases compared to 50% last year. In contrast, credit card usage has declined from 47% to 40%, indicating a possible move towards greater expenditure control.
"Australians are heading into Christmas spending with a blend of practicality and cautious optimism. A shift from credit card to debit card use signals a strong intent to celebrate within tighter financial control, and more creativity in utilising budgets underscores our resolve in keeping with traditions albeit challenging financial circumstances."
That statement was made by Martin Filz, Chief Executive Officer at Pureprofile, commenting on the evolving Christmas spending habits seen in the report.
Gift preferences
Gift cards and money remain the most desired Christmas presents-though interest has dropped slightly to 43% and 36% respectively (down from 46% and 41% last year). Clothing and footwear gifts have gained popularity, now at 41%, an increase fuelled particularly by those aged 18-24. High-value gifts such as technology (28%, up from 22% in 2024) and jewellery (26%, up from 23%) have also grown in demand, as has the appeal of skincare and beauty products among 25-34-year-olds, rising from 13% last year to 29%.
Some respondents reported wishing for gifts beyond physical items, including cheaper food prices (23%), lower interest rates (16%), reduced power bills (16%), and lower rent (13%).
Food, travel and priorities
In terms of festive food and drink, three in five Australians plan to keep their spending below AUD $500, while 21% are opting for more budget-friendly options. Additionally, a third hope to receive food, confectionery, or alcoholic beverages as gifts, up slightly from 30% in 2024.
Travel is becoming a greater priority, with 49% planning to travel over the festive period-up from 41% last year. A quarter of respondents wish to travel locally, 19% domestically, and 11% overseas. Younger Australians (aged 18-24) show the largest increase in interstate travel intentions. The number of people planning to take extended leave beyond standard workplace shutdowns has also grown, rising to 14% from 8% last year.
Resolutions for 2026
Looking ahead to next year, over half (56%) of Australians intend to save more money, reflecting continued cost-of-living pressures.
Other popular resolutions include health and fitness goals (42%), increased travel (34%), improvements in wellbeing (31%), and spending more time with family (30%).
Respondents also specified that, for 2026, discretionary spending is likely to focus on travel (24%), fashion (22%), household items (21%), and home improvements (19%). Fewer respondents are likely to invest in longer-term areas such as education (7%) or financial products (8%).
The report finds that while Australians are prepared to spend more on Christmas this year, they remain prudent in their approach, adopting a value-driven outlook and continued attention to personal financial management.
