Is our Christmas spending behaviour akin to; hello December and goodbye to any semblance of responsible budgeting. Last weekend, with the spending train already hurtling out of the station in this house, I was forced into a pretty blunt conversation with my two young children about money. They had argued, successfully, to wait to write their Santa letters until after last Fridays RTÉ Late Late Toy Show. I had agreed, despite being conscious that this letter writing lag put Santa’s present purchasing firmly into his last pay packet before Christmas -- that being the same paycheque that diminishes far quicker than any other. To put it in monetary terms, analysis by the Credit Union suggests that higher inflation in 2022 will see buying power for the average household drop by approximately €3,000 this Christmas.

Now before anyone starts shouting “Scrooge” or “Grinch” at me on the street, I absolutely love Christmas. I particularly love the run up to the big day from the start of December onwards. I love the preparations and decorations, the get-togethers and parties, the food, chillier days wrapped up in warm clothes, the glow of the lights and the glitter of sequins and tinsel. I love it all and I want my children to love it too. However, for many of us this is also the time of the year for our biggest overspend. Personally, I think that it is worth it -- to a point – to celebrate with loved ones and treat ourselves. However, with the cost of living continuing to rise that ‘point’ might be, or at least should be, closer to normality than in previous years.

Such cautious spending rather than consumer despondency was the synopsis of the most recent Irish Credit Union (ICU) Consumer Sentiment Survey. With the index down to 45.3 in November from 46.1 in October, consumer nervousness is evident. However ICU analysts believe that Budget 2023 has had a positive impact with the figure up on the September low (42.1). Although this is positive for business, the ICU point to weakening household spending plans, claiming that this “hints that Irish consumers continue to adjust their outlays in the face of an increasingly uncertain environment.

Two-thirds of respondents said that they will have less to spend

As this Christmas may be difficult for many children and their families, the survey (completed in November) also asked Irish consumers about their spending plans for Christmas 2022. Two-thirds of respondents said that they will have less to spend with (worryingly) 20% either borrowing to fund extra Christmas spending or saying that they don’t know how they will finance it. Despite higher costs for just about everything, the survey also reveals that only one in 12 will reduce spend on their children.

This brings me back to my own children. With the Toy Show over, they understood that the time for indecision had ended and duly put pen to paper. The resulting letters were extravagant. A conversation was warranted and a rewrite advised. The desire and pressure on parents to ensure Christmas is magical makes such conversations even more difficult. An advert currently running on TV, part of the SafeFood START campaign, encourages parents to say no to their children when they look for treats and to offer a healthier alternative instead.

One of the ways parents are advised to get their children on board with this is to talk to them about what you are going to change and why. Children, the group say, accept change much better when they are involved and know what is happening. I am sure that the same recommendation could be applied to managing children’s Christmas expectations this year.

Read more

Your choice? ‘Long hours at high intensity’ or work-life balance?

Editorial: Did you hear Damien this morning?