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If you’ve felt the air go out of Christmas this year, you’re not alone. Nearly half of Kiwis say they’ll spend less this Christmas (NZ Herald / Afterpay survey, Oct 2025), and for once it’s not about being grinchy it’s about being done with the debt hangover that’s followed us through the last three festive seasons.
Afterpay’s findings show that 46 percent plan to rein in Christmas budgets, with about one in three relying on buy-now-pay-later (BNPL) to help cover costs. That’s not stinginess; that’s survival instinct. The cost-of-living crisis has turned “festive season” into “financial-pressure season,” and people are finally trying to stop the cycle before it bites again in January.
At Money Sweetspot, we’ve seen what 2025 has really done to Kiwi families. This has been a miserable year for loan approvals. We’ve had to say no more often - not because people aren’t trying, but because they’re already carrying too much debt to safely reset.
The total debt of people who’ve applied for a financial reset is similar year on year. However, the average amount of debt each of those applicants is up 50% to $15,000. This, against a backdrop of some pretty depressing economic numbers (unemployment
at the highest rate in 9 years, and 470,000 Kiwi in credit arrears!) is disheartening to say the least. And whilst the Official Cash Rate has continued to fall my view is a cut that signals fragility, not recovery.
We keep hearing about “green shoots,” but out here the soil is still dry. Even as a business that just won the Financial Services Federation Innovation Award, I can say hand on heart it’s still brutally hard. The headlines love to celebrate innovation and resilience, but behind every award there’s a cash-flow spreadsheet, a sleepless founder, and a team stretching every dollar to keep doing the right thing.
The truth is, it isn’t just families buckling down it’s businesses too. Social enterprises, start-ups, and impact ventures like ours are juggling rising costs, tightening capital, and delayed decision-making from partners.
We’re proud of our mission, but purpose doesn’t insulate you from interest rates or arrears. So when we talk about financial stress, let’s stop pretending it’s only households. It’s the whole ecosystem holding its breath.
Now, back to the Kiwi families we’ve spoken to this year. Here’s what our own lending data is showing.
When things feel hopeless people find hope where they can. And with one in five New Zealander’s being affected by gambling at some point in their lives, it comes as little surprise that we’ve seen a marked increase in problem gambling and harm from our applicants- last month we received an application from someone who had gambled $26,000 over three months, one of the highest amounts we have seen in three years. Unaffordable gambling has crept up to being one of the top reasons for us to say no to a financial reset.
Almost every loan application now includes BNPL debt. It’s the invisible line item on people’s financial statements easy to sign up for, hard to track, and devastatingly effective at hiding how much you actually owe, with applicants paying on average between $200 and $550 per week on their BNPL purchases.
And here’s the Christmas kicker: For most of the year, people over-estimate how much they owe on BNPL- they feel like it’s “a lot,” which at least shows awareness.
But in January and February, that flips. People under-estimate their BNPL spending by 50 to 100 percent. They’ll tell us they owe $400 when the true total is $800. That’s because the “pay-in-four” repayments for all those December gifts and online deals start colliding at once and suddenly the new year’s pay packet is already spoken for.
That’s the quiet danger in our new debt landscape. It’s not one big bad loan; it’s a thousand tiny obligations all due at the same time.
New household lending increased by 28% year on year- primarily driven by personal loan demand. The other side to that demand has been continued elevated arrears with Centrix’s September 2025 Credit Indicator shows BNPL arrears around 8 percent and BNPL applications up 9.2 percent year-on-year. Combine that with higher unemployment and negative saving, and you have the perfect conditions for a debt relapse disguised as holiday cheer.
What we see each and every day is that people aren’t irresponsible they’re human. When life is unpredictable and Christmas is marketed as proof of love, emotional spending takes over. But the consequences are brutally predictable: January arrives with a smaller pay packet, four BNPL repayments, two missed direct debits, and a sudden sense of shame that stops people from reaching out early for help.
And yet, there’s hope in the numbers. The fact that half of New Zealand is choosing to spend less this year shows that financial awareness is finally starting to stick. For every household that says “not this year” to another credit card, that’s a win for wellbeing.
Online spending has grown 9 percent year-on-year, but average transaction values are smaller (NZ Post / IPC Report 2025). People are still celebrating- just differently. They’re buying fewer things, more intentionally, often from local businesses. That’s financial resilience in action.
At Money Sweetspot, our customers who’ve completed a financial reset tell us the same thing: “The best gift I gave myself was peace.” They’ve paid off debt, built small savings, and earned rewards for engaging with financial education. They know the difference between making Christmas happen and making it last.
If 2023 and 2024 were the years of coping, 2025 can still be the year of reset. Financial wellbeing doesn’t mean having no debt it means knowing the story behind your debt, owning it, and writing the next chapter with clarity.
This Christmas, that story might start with a smaller budget, a few honest conversations, and a refusal to swipe for the sake of appearances. It might look like a spreadsheet instead of a credit card. But that’s how change begins- not with grand gestures, but with honest ones.
At the end of the day, debt doesn’t build resilience- a pathway out does. And every Kiwi - households, founders, and communities alike - deserves that pathway, whatever the season.
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