The Lipstick Index (and what we can learn from it)

What does a lipstick have to say about the economy and our financial readiness to weather rising healthcare costs? The answer might surprise you. To get started, let’s take a look at The Lipstick Index.

First, a recap. During the recession in the early 2000s, consumers were hesitant to splurge on luxury and big-ticket items, but they didn’t stop spending entirely. In a surprising twist, the sales of cosmetics products went up. The theory goes that during a bad economy, people will indulge their need for luxuryon small but affordable purchases that make them feel good. Since then, a spike in cosmetics sales has been closely associated with a worsening economy¹.

What can we learn from this observation? As financial analysts brace for a higher likelihood of a recession in Singapore, the question on how to spend ourmoney (and what to spend it for) is becoming a hot topic.

Here’s our take: it’s fair to spend some of your hard-earned money on things that give you joy, whether it’s a new haircut, movie night, or weekend brunches. But while you’re chilling at your favourite café, spare a few minutes to ensure that you’ve got everything you need to protect what matters most: your health, your finances, and your loved ones. These tips can start you off in the right direction!

Sources:

1. https://www.straitstimes.com/life/style/recession-indicators-are-lip-balms-and-treatments-the-new-lipstick-effect-in-2025
2. https://www.moh.gov.sg/managing-expenses/schemes-and-subsidies/medishield-life/medishield-life
3. https://www.channelnewsasia.com/singapore/health-insurance-medishield-life-scheme-april-2025-government-support-measures-4677041
4. https://smartwealth.sg/critical illness statistics singapore
5. https://www.greateasternlife.com/sg/en/personal-insurance/our-products/health-insurance/great-critical-cover.html
6. https://www.careshieldlife.gov.sg/careshield-life/about-careshield-life.html
7. https://www.greateasternlife.com/sg/en/personal-insurance/our-products/health-insurance/great-careshield.html
8. https://www.greateasternlife.com/sg/en/personal-insurance/our-products/personal-accident-insurance/great-junior-protector.html
9. https://www.singsaver.com.sg/blog/sandwich-generation#
10. https://nuhsplus.edu.sg/article/parkinson-s-disease--insights-from-a-neurologist
11. https://news.smu.edu.sg/news/2023/05/12/more-believe-persons-dementia-can-live-fulfilling-lives-though-stigma-associated
12. https://www.greateasternlife.com/sg/en/personal-insurance/our-products/life-insurance/great-life-multiplier.html