What’s Your Lipstick Index?

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You can’t make it through an economics course without hearing the words “lipstick index”. Coined by Estee Lauder chairman Leonard Lauder, the “lipstick index” is a term based off data that showed when the economy trended downwards – even in deep recession times – the sales of cosmetics actually increased overall, presumably because shoppers felt an emotional response to wearing makeup, which boosted their moods in tough times. 

This theory has been debunked on a macro-economics level (and we’re not really thrilled about its sexist, objectifying undertones, to be honest) but it does apply to many of our own individual spending habits. We tend to gravitate towards routines and habits that make us feel better when we’re lowest, particularly those habits that we’ve been trying to avoid on better days. These little things often include spending money – like ordering delivery for dinner instead of cooking, buying a coffee before work, grabbing a candy bar at the grocery store checkout. 

Let’s be clear – you have every right to make these purchases whenever the hell you want. What could be helpful, though, is noticing their correlation to how you feel. Are you always turning towards the same spending decisions when you’re feeling stressed, overwhelmed, or anxious? Are these purchases a healthy part of your process for working through them? If the answer is yes to both, it might make sense to put some money aside for your “lipstick index” fund, so you can always rely on the finances to back up these decisions.

If these purchases are indicative of harmful behaviors to your overall health and wellness, consider each future purchase an investment into a new habit. Case in point – I’m always ordering a cheeseburger when I’m tired and run down. Something about a big burger and fries always makes me feel full again. It might be nice some of the times, but not every time. So now, I might still eat out, but opt for a healthier option (veggie burger, minimum) so I can start shifting my response. And because I’m shifting a habit, I feel less guilty with the impact the expense has on my bottom line.

What’s your “lipstick index”? Join the community on Instagram and let us know.

Photo by Eye for Ebony on Unsplash.