The most wonderful time of the year can also be an expensive one for many Kiwi families.
Christmas spending, activities for kids and back-to-school costs can leave families starting the new year under financial stress.
Tom Hartmann, personal finance lead at Sorted, says the beginning of the year is a great time to make strategies to bring debt down as quickly as possible.
“Many people will be coming through [the holidays] with a bit of a debt hangover,” he says.
“We tend to overestimate how much we can take on comfortably and then it gets uncomfortable.
“If you can get through it without taking on new debt, that would be ideal.”
Hartmann says buy now, pay later (BNPL) can be a common cause of financial problems when not used appropriately.
“BNPL is really good if you need to set up instalments for something that’s a bit bigger, [to] make it more manageable.
“What’s tricky about BNPL is having multiple ones on the go. If you’re buying gifts, buying other things for the festivities, even everyday things, when you have too many they become difficult to juggle [and] can overwhelm you financially.”
He says whenever someone is borrowing for everyday expenses, it’s “generally a red flag”.
An Afterpay survey in 2025 found one in three (35%) Kiwi shoppers were feeling pressure about holiday expenses.
While nearly half (46%) said they planned to spend less this Christmas, 11% said they still expected to invest over $3200 in their celebrations.
Financial mentor David Verry says there is always an uptick in people approaching budget services in the new year.
“Late January, early February are the crunch points for family finances as the costs of Christmas come home to roost.
“And then there are the immediate back-to-school costs hitting.
“Regrettably, we assist a lot of clients with KiwiSaver hardship applications.”
Verry says whether it’s Christmas spending or looking ahead for 2026, setting a budget and sticking to it is one of the most important things you can do.
“Start putting that money aside so it doesn’t hit you in one go,” he says.
“For Christmas 2026, you can start doing it as soon as the new year kicks in and spread the saving out.”
Verry says while most people can get all the basics down in a budget, it’s often the things that don’t occur regularly that trip people up.
“This can be birthday and Christmas presents, car and house repairs and maintenance, insurance premiums, doctors and dentists.”
Hartmann says everyone can do something to optimise their finances further, regardless of their financial position.
“There’s always something that you can tune up in order to get more growth out of your finances, in order to meet future needs or more resilience in case something happens.
“It typically has to do with how much money you’re saving, how much money you’re investing, how much are you paying in interest and how much are you paying in fees.”
Tips for getting ahead financially in 2026:
- Have a budget – and stick to it.
- Are you getting the best deal available on power, phones and internet?
- Know your debts and repayment obligations.
- Is debt consolidation the right option for you?
- Set up an emergency fund for unexpected expenses.
Cameron Smith is an Auckland-based business reporter. He joined the Heraldin 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.