Originally published: December 2023. Updated: November 2025 to reflect current financial conditions and budgeting tips.

Christmas in 2025 comes at a time when many Kiwi households are still juggling higher costs and tighter budgets. The good news? With a bit of planning, you can enjoy the season without starting the new year with a financial hangover.

It all comes down to two things: how you budget, and how you spend. 

In this guide, we’ll look at:

1.    Budgeting for the silly season – from figuring out what you need and where it will come from, down to making saving happen.

2.     Making the most of your hard-earned dollars – so you can stop the Debt Grinch from stealing your Christmas.

Budgeting for the silly season

Here’s what you can do to make it work:

• Figure out what you need – Make a list of all the expenses you have to plan for, including presents, travel costs, food and drinks for family get-togethers, and anything else that comes to mind. Be as realistic or even generous as possible with your estimates; you can always adjust the numbers later. Also, try not to rush it, and maybe come back to the list after a couple of days, just in case you’ve forgotten something the first time.
  
  
• Consider where it will come from – Holiday spending tends to add extra pressure on our wallets. One way to reduce the impact is to find opportunities for cost cuts in your current budget. So, take a closer look at where your money is going. Sometimes, while we focus on big-ticket items, it’s the little things that add up, like monthly subscriptions. Perhaps, there’s something there you’re not using much and can easily do without.
  
  
• Make saving happen – If you’d like to save money for Christmas, why not make it as frictionless as possible? Most banks allow to open virtual sub-accounts in your bank account, which can be used as ‘buckets’ for different purposes. For example, you might have one for home renovations, one for travel, and why not, one for the holiday season. Then, all you need to do is set up automatic transfers between your main account and these smaller buckets. If your budget allows it, putting aside $20 a week for a year will give you $1,000, without even having to think about it.
  
  
• Check your progress – Whatever strategy you choose, checking progress is key. You can still make adjustments along the way if needed.

These are just some examples, but there may be other things you can do to boost your holiday budget, like creating an extra income source with a side hustle, hosting a garage sale to get rid of unused stuff, and more.

The good news is that Christmas happens at the same time every year. So, you can give yourself enough time to plan and find a strategy that works for you; if not this year, the next.

Make the most of your hard-earned money

Looking for ways to avoid the holiday spending hangover? Here are some tips to help you.

• Start your Christmas shopping early – You’ve probably heard this one plenty of times: don’t leave Christmas shopping to the last minute. And as it turns out, more and more Kiwis are embracing the advice. Past surveys have shown that around a quarter of Kiwis shop up to six months ahead of the holidays, while one in five still leave gift-buying until the eleventh hour. Ring a bell?

  Last-minute shopping often means getting stuck in the crowd, and facing the possibility that the present you had in mind is sold out. It can get stressful and frustrating, and unless you take advantage of last-minute discounts, it may also lead you to overspend.

  The solution? Starting your Christmas shopping early and with no rush. Not only does it make for a more enjoyable experience, but you can also keep an eye on specials as they pop up and save money.

• Understand your emotional response – If you’re an emotional spender, Christmas can put your self-control under extra pressure. And there are different reasons for it.
  
  On the one hand, holiday shopping tends to be emotionally charged, stirring up a whirlwind of memories, expectations, and other inner chatter. On the other, in the lead-up to Christmas, we’re also exposed to marketing strategies(1) that are specifically designed to trigger our spending impulses. For example, according to research⁽²⁾, consumers are more likely to spend more if there’s Christmas music playing and an ambient holiday scent lingering in the air.
  
  So, if you’d like to be more mindful about your spending, a key step is to pay attention to your own emotional response, and have a plan to stay the course.  
  
  
• Put your credit card on ice – We don’t mean this literally (though some people actually do it). What we mean is that the best present you can give yourself this Christmas is to keep the Debt Grinch at a safe distance.
  
  According to a post-Christmas survey(4) by Perceptive, amongst the top reasons why Kiwis spent more on credit cards over Christmas were getting reward benefits (43%) and spreading out holiday costs (27%).
  
  Of course, both are legitimate reasons. But they come with their own risks. Chasing credit card rewards can incentivise over-spending, which leads to more debt. And the same goes for spreading out the cost. Unless you pay off the credit card in full within the interest-free period, you may end up paying extra in interest – leaving you with a holiday debt hangover to deal with later.
  
  
• Beware of buy-now-pay-later options – What about buy-now-pay-later-options, then? Just like credit cards, with BNPL loans it can be tempting to spend beyond affordability. And because these options typically only require people to pay a down payment upfront, sometimes people forget about the other instalments, with missed payments easily turning into long-term debt.

• Look beyond brand-new gifts – Not every great present has to come straight off the shelves. Pre-loved or second-hand gifts are becoming more common in 2025, with more Kiwis turning to Trade Me, Facebook Marketplace, and local op-shops. A thoughtfully chosen second-hand book, vintage board game, or refurbished tech can be just as special as something brand new — often at a fraction of the price. It’s kinder on your wallet and the planet, which is a win-win.

• Give experiences, not just things – Sometimes the best gifts aren’t things you can wrap. Experience-based gifts — like concert tickets, a family day out, a cooking class, or a simple picnic — can be more memorable than the latest gadget. They don’t have to be expensive either: movie passes, mini-golf, or a voucher for fish and chips at the beach can all be fun, affordable ways to celebrate together. You can also create your own “experience vouchers” — from babysitting to home-cooked dinners — which cost little but mean a lot. With budgets tighter this year, focusing on experiences over more “stuff” can take the pressure off Christmas spending and remind us what the season is really about. You can often set a clear budget upfront, which helps avoid the last-minute temptation to overspend.

The Christmas wrap-up

In a nutshell, the best way to go about Christmas shopping is to plan ahead, keep emotions under control (as much as possible), and only buy what you can afford. Easier said than done – we know this all too well – but if you can give yourself the gift of preparedness, holiday spending may feel less of a chore and more like a shared joy.

If you can plan for Christmas spending, you can plan for your financial future too. Whether it’s sorting your KiwiSaver plan or building your rainy-day fund, small steps now set you up for a stronger 2026.

Further reading:

(1)   TheConversation.com – The Psychology of Christmas shopping: how marketers nudge you to buy

(2)   Journal of Business Research – It’s beginning to smell (and sound) a lot like Christmas: the interactive effects of ambient scent and music in a retail setting

(3)   PriceSpy survey

(4)   CusterMonitor.com – The credit Christmas: Kiwi Christmas spending in 2020

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.