News
With rising cost of living, interest rates inflation and general economic fluctuations impacting so many in the second half of 2022, it was forecasted that we’d collectively be spending less at Christmas this year.
WhetherAustralians are saving for rainy days ahead, or simply can’t afford the usual Christmas splurge, research conducted by Compare the Market revealed that more than 40per cent of Australians said they’d spend less than they have in the past this festive season.
Was that the reality? The dust hasn’t yet settled enough to really understand the numbers, but it’s certainly worth looking at to reveal the true cost of the current economy to households.
That same survey suggested around 10 per cent of respondents said they’d be looking closer at holiday sales than they have before.
Almost all respondents cited rising interest rates alongside higher cost of living as the reason behind their shift in fiscal thinking. With fuel price fluctuations, higher energy costs and so many other areas of our budgets affected, it’s little wonder we’re keeping our wallets in the drawer.
The affects are far reaching, with 35 per cent of respondents even going so far assaying they’ll not be doing Christmas lights this year to save on purchase and running costs…
1: Will lower spending do further damage?
It’s almost a catch 22, but with lower spending comes a drop in revenue for businesses who’d normally do their best over the end of year period. This could ultimately affect employment statistics and even further impact income levels of those most vulnerable to the situation by way of less available working hours or even total job losses.
2: Will it mean the “sale” season will make up for it?
If money saved in the lead up to Christmas finds its way back into the economy through a bumper sale period the whole issue could be null and void, but what’s the cost of this to businesses? Well, a reduction in margins on products could still create the same issues as above, leaving less room to pay staff from profits even though turn-over may have come back somewhat.
3: What’s the effect moving forward?
Well, the outcome of lifting interest rates is almost designed to slow spending, and if the research referred to above is indeed correct, it’s done its job. But, again, what then is the overall outcome? Hopefully we see easing financial pressures in the first half of 2023 (as has been forecasted) that will ultimately allow more financial flexibility for those affected, giving businesses back the revenue they may have missed over the Christmas period.
As the new year rolls in, we’ll have a clearer picture of our collective economic future, but research like this reminds us: having the right strategy for your personal and business finances can help you navigate rougher seas. So, if you’re looking for tailored strategic advice to build or bolster your financial position, the Attune team will be here in 2023to help make it happen for you.
Start the year right, send us an email (anytime) or give us a call on 1300 866 113 (after January 9) to set up an appointment to secure your financial future.
