However, the opposite trend is emerging, where small indulgences or self-reward purchases remain strong. This phenomenon is known as the lipstick effect.
The lipstick effect refers to an economic concept in which consumers continue to buy small, emotionally satisfying items such as cosmetics or fashion accessories even during economic downturns.
Rather than saving entirely, many people seek affordable pleasures as a way to escape financial pressures.
Global economic conditions remain challenging. Mass layoffs across sectors, rising prices of daily essentials, and the impact of trade wars and policy tensions have increased public stress.
Yet the trend of self-reward is clearly visible, with individuals still spending on coffee hang-outs, skincare, perfumes, or dining out after payday, albeit with more careful budgeting.
Citing data from IDEAS-RePEc, economic research shows that self-reward plays an important role in maintaining personal motivation.
In behavioral economics, self-reward helps individuals cope with self-control challenges. Small treats, ranging from sweets or cosmetics to books or sports equipment, can sustain motivation under life’s pressures.
For instance, Wiwi Fatma (40), a career woman living in Jakarta, enjoys collecting premium hijabs. For her, comfort, quality, and a distinctive look are part of investing in herself.
“I cannot wear cheap hijabs. The quality is different. It is better to buy a more expensive one that lasts than a cheaper one that feels hot and wears out quickly,” said Fatma, who is also a fitness enthusiast.
On average, she spends around Rp1.2 million or about US$73 to purchase two to three hijabs during special occasions like Eid.
As she enters her 40s, her priorities have shifted toward health. She now dedicates two to three hours regularly at a gym near her home, a commitment that comes with significant costs.
A two-year gym membership costs her around Rp8.6 million or about US$520, excluding personal trainer sessions: 50 sessions alone cost approximately Rp12.45 million or about US$750.
She also takes health supplements such as vitamin D3 K2, priced at around Rp1 million for a two-month supply.
Fatma often makes time for self-healing trips, such as enjoying nature by hiking or visiting waterfalls. Depending on the destination, costs range from Rp500,000 for a day trip to Bogor to Rp2 million for a trip to Mount Bromo. She said she goes on such trips up to twice a month.
For her, these expenses are not wasteful but long-term investments in physical wellness, mental health, and much-needed breaks from a busy routine.
“Going on trips is more about the experience. I build new connections and friends, while buying things gives satisfaction from long-term use,” she said.
A similar view comes from Ellysabeth Monica (33), a singer and private music tutor. For her, self-reward comes in the form of high-end branded items, including makeup and handbags.
With two income sources, she is able to afford such items even during tough economic times. In her view, the quality offered by premium brands justifies the price.
“For example, with makeup, I compared colors and textures of high-end brands with drugstore products, and the results are different on my skin,” said Monica, who recently moved to the United States.
Despite perceptions of extravagance, she feels the spending is worth the quality and satisfaction gained. For her, self-reward is important to keep motivation high.
“There are always challenges at work. So self-reward is a helpful tool to stay motivated,” she noted.
Psychological need
This phenomenon aligns with an analysis by INDEF economist Abra Talattov, who stated that self-reward or luxury spending amid economic downturns is not unusual.
He emphasized a psychological need among the public to maintain self-confidence and work enthusiasm, even when overall purchasing power is under pressure.
“The motivation is to relieve stress and fatigue from work. It is a form of release. They need time and space for entertainment or leisure,” he told ANTARA.
Talattov also noted that this trend reflects a shift in consumer behavior. Normally, he explained, during economic slowdowns, people would focus on spending on essential goods like staple food.
However, the definition of daily needs has expanded, not just physical necessities, but also mental and emotional well-being.
“People are now allocating funds to maintain mental health, build a personal reputation, or establish a lifestyle that reflects their branding (or identity),” he added.
To sustain a healthy work-life balance, he explained that there is a need for government support to help the public care for their mental health without significant costs, such as holding inclusive hobby communities or free fitness facilities.
“For example, the Jakarta provincial government once proposed building free public padel courts. Initiatives like that need to be widened,” he said.
Furthermore, he mentioned that consumerist lifestyle among the younger generation is not new, but the variety has increased, fueled by social media and the fear of missing out (FOMO).
While this may appear to be a normal self-reward behavior, it carries long-term risks like fragile financial situations during sudden shocks.
This shows the importance of financial maturity, as well as the government’s role in fostering a healthy ecosystem.
Translator: Nabila, Kenzu
Editor: Primayanti
Copyright © ANTARA 2025
