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More than 70% of Australians admit to overspending on everything from kid’s toys to alcohol…

22 November 2016

With the expensive Christmas period now almost upon us, new research reveals that the majority of Aussies are overspending on a large range of items and experiences.

A recent Galaxy survey of 1,014 people nationwide conducted on behalf of Fox Symes, the leading provider of debt solutions in Australia, found the majority of Australians (73 per cent) have problems with overspending. A massive number of Generation Y (86 per cent) and parents with children living at home (83 per cent) are the main over spenders.

The most common items overspent on include groceries (35 per cent), entertainment such as socialising, restaurants and movies (30 per cent), holidays (24 per cent) and clothing (24 per cent). However, alcohol (16 per cent), technological gadgets (15 per cent), household items including furniture, bedding and garden gear (15 per cent), shoes (15 per cent), children (13 per cent) and cigarettes (11 per cent) are also areas where Aussies have spent more than they intended.

“People generally overspend on discretionary items which they really do not need,” says Fox Symes’ director Deborah Southon. “Typically it’s this discretionary spending which can really land people in hot water and lead to unmanageable credit card or personal debt. This is particularly concerning for younger Australians who often have a lower income, but are more likely to be careless with their money and therefore overspend.” Young respondents aged 18 – 24 admitted to overspending on entertainment (61 per cent), clothing (52 per cent), shoes (33 per cent), technological gadgets (26 per cent) and worryingly, cigarettes (18 per cent.).

However, keeping spending under control and not adding to your debt in the festive season is particularly challenging for many. “People tend to forget about how much they spend during the silly season,” says Ms Southon. “But then in the January to March quarter insolvency numbers increase.”     

The demands of Christmas and inevitable rush for gifts is also sure to put extra pressure on families – especially women. Mothers with children at home say they already overspend on children’s items like toys and kids’ clothes (37 per cent compared to 26 per cent of fathers). Mums are also concerned they’re over spending on groceries (48 per cent) versus dads (35 per cent), so the pressure to shop for food at the festive time will be only intensified for many.

“Mums are under a lot of social pressure at Christmas time to buy expensive presents for their kids,” says Ms Southon. “We also tend to go to more social gatherings and our food expenditure may also increase because Christmas is a time to invite family and friends over. But the reality is many people simply can’t afford all the trappings of Christmas. If you’re already in debt, then you’ll only start the new year off with even more financial burden and stress.”

There were also significant differences between men and women’s spending preferences. Almost one in three women (28 per cent) overspend on clothes compared to 19 per cent of men. “Many women are spending far too much on clothes and accessories,” says Deborah. “It is easy to be tempted to buy unnecessary goods and shopping on line makes buying items even more convenient.”

Ms Southon says continual advertising had also swayed many men to spend big on technological devices. One in five men (21 per cent) splurge on technological gadgets compared to only 10 per cent of women. “It seems like there’s a new gadget on the market every week,” she says. “There’s pressure to keep up with the latest thing which is never ending.” 

The festive period will no doubt be another boozy one for one in five men (20 per cent) who admit they spend more on alcohol than they should versus 12 per cent of women. According to ASIC, alcohol is one of the country’s biggest discretionary spends. Australians already spend $24 a week on booze which equates collectively to $14.1 billion a year.

ASIC also says that the average Christmas spend on gifts is $439 per person with 20 per cent sticking the cost on their credit card. With that in mind, Ms Southon says if you already know you’re an over spender, then it’s time to pull back the reigns this Christmas. “Don’t go into the New Year with a financial hangover,” she cautions. “Have a good time, but spend within your means.”

About the research The study was conducted by Galaxy Research between 18-22 August, 2016. The survey was administered online amongst a nationally representative sample of 1,014 Australians aged 18 years and older covering: NSW, ACT, VIC, TAS, QLD, SA and WA.

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