The real cost of gift-giving: Financial stress (part 1 of 3)

The tinsel and decorations may be long packed away under the stairs, but eight weeks after the festive season more than two million Australians are still paying off holiday credit card debts, according to Roy Morgan Research.

One of the leading pressures on many people’s already-strained financial position is the habit of over-spending on gifts; gifts that don’t necessarily prove our love for others. In this three-part series we will explore the size of our national gift-buying problem, look at the health impacts of the financial stress that follows and then explore how a targeted mindfulness practice can help change the auto-pilot approach to gift-giving while potentially bringing us even closer to loved ones.

Overall, Australians spent an average of A$539 on Christmas gifts (the total spend on gifts was expected to be $9.8 billion) according to finder.com.au. Over this period an astronomical A$28 billion was plunged on cards.

More than 470,000 of us will take a painful six months to pay off holiday debts, while we still managed to spend an average of $315 each on Valentine’s Day (men paid more, $386 per person). All this while also juggling huge mortgage, student loan and/or car repayments. The national home loan bill topped A$1 trillion for the first time last May, according to the Reserve Bank.
But while we are weighed down with unavoidable repayments on big assets, the retail calendar cares not and rolls on cheerfully.

Easter is next (luckily the major supermarkets stock around 50 lines of chocolate each, not counting millions of Easter buns), then comes Mother’s Day (May 14), when consumer spending spikes to around $2 billion, according to the Australian Retail Association.

From mid-year on we face the long march of birthdays; the most popular months for birthdays in Australia include May, July, August, September and October, according to the Australian Institute of Health and Welfare. Anyone who has hosted a children’s birthday party knows how expensive and high pressure they can be, with parents forking out anywhere between A$300 and A$3000. Then there’s the angst over how to please teenagers and other loved ones, a worry which is almost always settled by spending at or above our absolute limit.

Around this time, the reality of another entire year with our backs to the wall financially begins to sink in. Many of us have to accept we can’t afford a late winter or spring holiday, let alone a newer car – not with so many expenses and December just around the corner again. We make do with massages, maybe some new shoes and ice cream at the movies.

But the pre-holiday gift-giving hasn’t finished yet. Father’s Day is September 3, (on which about A$700 million is spent), followed by weddings and wedding anniversaries galore as the weather warms up. Spring and autumn are most popular seasons, April, September, October and November are the most popular months to get married.

While it seems like the right thing to show our love by buying new toys, trinkets, treats and gadgets for children, family and friends the cost is in black and white in our online statements.

We spend thousands upon thousands of dollars each year to try and please loved ones. And for that, what do we get? Apart from uneasy feelings about overspending on gifts given (and received), we get a mountain of debt stress which seems to grow taller and wider every year, casting a shadow over us even when we are at work.

More than half of Australians say personal finance issues are their leading cause of stress, according to the Australian Psychological Society.

AMP’s Financial Wellness in the Australian Workplace report found financially stressed employees took four more sick days than those who were not, and lost nearly seven hours per week in productivity.

The report said ‘bad debt’ was the leading cause of financial stress, with ‘supporting the family’ fourth and ‘budgeting’ fifth.

“Our research shows it has a negative impact on key performance outcomes such as job dedication, productivity, innovation, turnover, absenteeism and efficiency.”

“This represents a total cost of $47.2 billion to Australian employers annually,” the report concluded.

To find out how financial stress affects our health, check out part two in this three part series.

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