Westpac NZ is urging households to prepare a festive season spending plan as new research shows New Zealanders remain under significant cost-of-living pressure.
A survey of nearly 1,100 Westpac customers found 73% were extremely or moderately concerned about rising costs, a level broadly unchanged from last year.
Forty-two percent of respondents said they expected to spend less this holiday season, compared with 15% who expected to spend more.
Helen Ryder, Westpac NZ general manager consumer banking and wealth, said taking early steps to plan spending could help people avoid financial stress later.
She said: “While it’s encouraging to see from the survey that 27% of people have followed a budget to plan for the holiday season, 40% said they hadn’t yet done anything in particular to prepare themselves financially.
“Taking some action now to plan your spending can help avoid a cash crunch or debt hangover down the track.”
The survey found cost-of-living pressures had already shaped spending behaviour throughout the year.
Seventy-four percent of respondents said they had cut back due to higher costs, and of those, 90% reduced spending on non-essentials such as dining out, shopping and entertainment.
That pattern is expected to continue into the festive period.
Among those who travelled last year or plan to travel this year, 39% said they would spend less on travel, while 46% of those using holiday accommodation said they would reduce their budget.
Ryder said many households were still adjusting to persistent price pressures.
She said: “This year has been tough for many New Zealanders, with prices continuing to creep higher despite inflation coming off its highs.
“Our survey shows people have been responding by cutting back on spending and some New Zealanders may be choosing to stay closer to home for the holiday season this year.”
She encouraged families to make a plan together to help reduce stress. She said: “We hope people will get a chance to relax with their families over the coming weeks. To reduce financial stress, we recommend sitting down as a family and putting some time into planning out your summer spending and then sticking to your plan.”
Westpac is advising customers to set clear spending limits, prioritise essential costs before discretionary items, discuss gift expectations with family and friends, prepare shopping lists to avoid impulse purchases, and consider buying groceries earlier to avoid higher prices closer to Christmas.
The bank is also encouraging customers to minimise reliance on credit where possible to avoid starting the new year with additional debt.