“I feel really sad that Christmas has become so commercialised and families feel so much pressure to buy.” 

Those thoughts are from Bay Financial Mentors manager Shirley McCombe, who said the holiday season was often “really stressful and results in conflict”. 

“Regardless of beliefs around the meaning of Christmas, it should be a time to spend with the people you love. 

“There is huge pressure, especially when you have children, to buy gifts you may not be able to afford and this year, I imagine we will see a surge in the use of Buy-Now Pay-Later (BNPL) and store cards.” 

She said while BNPL solved the “here and now” problem it could create much bigger issues down the track if buyers did not have a plan to pay the money back. 

“We see this especially in the New Year when people face multiple payments all due at the same time, and just as kids are returning to school, and while BNPL products don’t incur interest, there are fees if you miss payments, and it rapidly starts to impact on your credit score.” 

She said the service was usually quiet after the Christmas/New Year break. 

“But this year we had 40 referrals from Here to Help U alone in January. Most people were looking for assistance with food, as it isn’t just the cost of gifts, but food for Christmas Day and extra meals for children home from school. 

“That is going to be even tougher for many this year and many will need to approach Christmas differently.” 

Shirley McCombe, general manager at Bay Financial Mentors. Photo / Alex Cairns 

Financial Ombudsman Susan Taylor said people needed to be sure they could afford to use BNPL facilities, as it was still debt that must be repaid once the festive season was over. 

“While we know people are facing increasing financial pressures at this time of year, and it is a time of giving, you don’t want to give yourself a headache in the New Year. If you do miss a payment and penalty fees start being charged, that’s when we see people getting into trouble.” 

She said people could also find themselves struggling to pay back other debts, such as car loans, because they prioritise the BNPL payments. 

It was important for people to speak to their lender early if they were experiencing hardship. 

Christmas dinner does not have to be the traditional ham or turkey. Photo / Doug Sherring 

Top tips for Christmas on a budget 

-The best time to plan for Christmas is Boxing Day. Put a little aside each week so that you don’t have to borrow for Christmas. 

-If you’re struggling with buying presents, talk it over with the family. Consider setting a limit, only buying for children or drawing a name out and buying for just one person. 

-Challenge people to give a gift that is homemade or repurposed. It’s good for the wallet and the environment. 

-The Christmas meal does not have to be the traditional turkey and ham. You’ll enjoy the food more knowing no-one has put themselves in debt to provide it. 

-Share the load, if everyone brings a plate, the cost and the work are shared. 

-Look around, there are often meals you can attend in the community at local churches. 

-If Christmas has not been a positive time traditionally for you, change the narrative, shake it up and create new memories. There are no rules: Have a picnic at the beach, volunteer at a community meal … make it something you’ll enjoy and remember for all the right reasons. 

Source: Bay Financial Advisors 

Need help? 

-Financial Services Complaints is a free financial ombudsman service. Call 0800 347 257, or email [email protected] 

-Bay Financial Mentors offers free advice and help with budgeting skills to both individuals and families across the Tauranga region. Call 07 578 0969 to make appointments or email [email protected] 

Carmen Hall is a news director for the Bay of Plenty Times and Rotorua Daily Post, covering business and general news. She has been a Voyager Media Awards winner and a journalist for 25 years.