Navigating End-of-Year Shopping: Balancing Desires and Dollars in Singapore

As we approach the final stretch of the year, the siren call of year-end shopping rings, enticing us with plenty of deals and promotions that can both elevate our spirits and potentially leave our budgets in disarray.

In this post, we dive into the intriguing findings of a recent study we conducted, unveiling the complex behaviours and attitudes surrounding end-of-year consumerism. We engaged a total of 239 respondents who took part in an introspective exercise where they were tasked to evaluate how they view and approach spending during the end-of-year period.

General Spending Styles

Before we begin examining the consumer psyche during the year-end sales, let’s take a moment to understand the foundations of respondents’ general approach to spending. The insights gleaned from this preliminary exploration lay the groundwork for comprehending the diverse behaviours and motivations of respondents.

Initial investigation of spending styles reveals a heartening portrait: nearly 60% of those surveyed showcase a conscientious approach to their finances, showcasing a commendable commitment to careful spending and a preference for saving. This conscientious majority appears to navigate the delicate balance between satisfying present desires and securing a stable financial future. However, within this group, a smaller fraction (13%) echoes the same disciplined approach to spending yet find themselves without any savings. This intriguing paradox prompts us to question the factors influencing this subset’s ability to convert careful spending into a tangible financial cushion.

Adding complexity to the narrative, 22% of respondents acknowledge harbouring concerns about their future financial well-being. This spending style emerged as the second most prevalent behaviour among our respondents. The conflict between thought and action introduces a layer of concern and prompts the need to explore the motivations behind this willingness to spend in the face of apprehensions about the future.

A deeper exploration of factors affecting spending behaviour revealed that age and relationship status were both not significant predictors of what type of spending behaviour an individual will engage in. This revealed that regardless of age or relationship status, individuals express idiosyncratic spending habits.

General Perception of the End of Year Sales

Almost 80% of respondents view the festive season at the year’s end not merely as a celebration but as a marketing gimmick to encourage extravagant spending. One respondent encapsulates this sentiment perfectly, stating, “Discounts and buy 1 get 1 free gimmick make people feel they’re losing out if they don’t buy, creating a sense of saving more money with those discounts and prompting additional purchases.” Another echoes this perspective, highlighting how the season’s emphasis on giving can entice people to spend on gifts, blurring the line between needs and wants.

Some participants also discern a pattern of retailers subtly hiking prices right before the sales season, casting a shadow of doubt on the authenticity of the proclaimed discounts. This prompts a discerning examination of the true value of the savings presented during these bustling sales events.

Interestingly, among those expressing dissent or ambivalence, the focus shifts to the joy derived from the festive season. For them, the happiness and camaraderie experienced during Christmas justify the associated spending, framing it as a one-time occurrence rather than a year-round indulgence.

End Of Year Spending Patterns

It is notable that despite the perception of the sales as a marketing gimmick, a substantial 73% of respondents still acknowledge an uptick in their spending as the year draws to a close. A prevalent theme underlying this surge is the holiday season, notably Christmas, which serves as a catalyst for increased expenditures. The spirit of gift-giving and the desire to treat oneself during this festive period are significant motivators among respondents. Additionally, some participants expressed the necessity of acquiring CNY clothes in preparation for the Chinese New Year, traditionally observed at the beginning of each year.

Another influential factor contributing to heightened spending is the advent of sales seasons, featuring major events like 11.11, Black Friday, Cyber Monday, and general year-end sales. Respondents acknowledge that these periods, marked by substantial discounts, incentivise increased consumption and contribute to the overall surge in year-end spending.

Moreover, participants point to vacations and a rise in social gatherings as additional drivers behind their increased expenditures. The inclination to partake in leisure activities, coupled with heightened social engagements, leads to greater spending on food and beverages during this period.

Approach to Spending during EOY sales

On a normal day, 62% allocate a portion of their income for spending and diligently adhere to it. This allocation reflects a conscientious approach to budgeting. Respondents consistently emphasize the importance of financial discipline, with one participant articulating, “I feel that this is a fundamental aspect of effective budgeting, ensuring that my expenses align with my financial capabilities and goals.” Others provide insights into their thought processes for managing finances, such as dividing income into weekly spending categories or exclusively earmarking funds for savings and investments rather than discretionary expenses.

Within the 37% of respondents expressing disagreement or ambivalence, there is an acknowledgement that maintaining a budget is a commendable practice, but adherence proves challenging due to varying circumstances every few months. This acknowledgement introduces the need for a nuanced understanding of the factors influencing individuals’ struggles in sticking to their budgets, as well as individual struggles and circumstances contributes to a more comprehensive understanding of financial behaviors. These findings underscore the dynamic nature of budgeting and financial habits, revealing a delicate balance between the desire for self-indulgence and the recognition of prudent financial practices.

In light of the sales season, an intriguing nuance surfaces during the sales season, where only 34.8% report sticking to their budget. This discrepancy highlights the complex dynamics at play during promotional periods. Participants offer valuable insights into this shift, revealing the decision-making process during sales.

Some fully utilise the sale season to stock up on essentials, where one aptly highlights, “The discounts given help me to save, so I will try to stock up.” Another shares that there is forethought to fully reap the benefits of the sale season — I do wait for the sales period, and it’s well planned ahead that I want to buy the things during these few event dates. Other respondents share the same approach where [they] curate a list of things to buy and wait till year-end sales and find themselves spending more during sales as it helps [them] save money rather than spending a lot over the year on non-discounted prices.

Others reveal that the decision-making process during sales involves a case-by-case evaluation of deals. This nuanced approach reflects a conscious effort to balance the desire for year-end indulgence with the recognition that not all discounted items may align with their financial goals. Some may prioritise the perceived value of each deal, contributing to a more fluid spending approach during sales events.

In essence, while respondents express a sense of deserving self-pampering, the nuanced reality involves a dynamic interplay between adhering to general budgets, navigating the intricacies of sale seasons, and making deliberate decisions based on the perceived value of each purchase. In tying these points together, it becomes evident that respondents navigate a delicate equilibrium between the overarching principles of financial discipline and the unique considerations introduced during specific spending seasons. The commitment to budgeting is evident in their general financial habits, while the nuanced evaluation of deals during sales seasons reflects an adaptive and thoughtful approach to managing their finances, considering both indulgence and prudence.

What contributes to increased spending during the EOY sales?

Nearly 50% of respondents openly acknowledge that end-of-year sales significantly influence their spending habits. This aligns seamlessly with the observed decrease in consistency in adhering to budgets during this period.

One respondent points out, “I think rewarding ourselves after a hard year is good,” a sentiment echoed by another who emphasizes the importance of self-care for preparing for a new year. These viewpoints resonated widely, with almost 70% of respondents expressing support for the idea that they deserve to pamper themselves after putting in hard work throughout the year. A participant succinctly captures this sentiment, stating, “I earn money to live. I don’t live to work,” aligning with others who share the belief that “money can always be earned again”. Others also shared the perspective, “If I don’t pamper myself, I will feel like I’m working so hard for nothing”.

However, among the 30% who either disagreed or remained undecided, divergent perspectives emerged. On one side, there’s a thought process emphasizing that self-care should be a year-round endeavour and not limited to the year-end period. A respondent encapsulates this idea, stating, “I deserve to pamper or discipline myself all the time of the year. The end of the year is a human construct.” This perspective suggests that a fraction of individuals recognise the importance of consistent self-care throughout the year, challenging the notion of reserving it for a specific time frame.

On the flip side, a concerning perception emerged where some respondents feel that they haven’t accomplished anything productive in the year, leading to a sense that they don’t warrant or deserve a year-end reward. This perspective sheds light on the psychological and emotional aspects tied to personal achievements and how they influence one’s perception of self-reward.

45% perceive an enhancement in spending power with a recurring sentiment that the “extra money gives the illusion that [the money] is free.” This intriguing concept surfaces more than twice, serving as a motivational factor for increased spending among this group.

Conversely, the others adopt a more conservative stance, viewing the extra money at the end of the year as a resource that should be saved, especially in anticipation of the impending increase in GST at the start of 2024. Some argue that the government payouts are insufficient to offset the projected 1% rise in GST. One respondent aptly articulates this concern, stating, “The government payouts are not sufficient to cover the rising cost of living and also inflation.” This perspective sheds light on respondents’ awareness and mindfulness regarding the economic landscape, recognizing the need to allocate extra funds to savings or investments rather than succumbing to reckless spending.

Interestingly, a substantial number of respondents exhibit financial prudence by utilizing the extra funds to pay off bills. One participant reflects this sentiment, noting, “I view that as money to help offset utility bills and conservancy fees.” Another participant emphasizes the limitations of government bonuses, stating, “Government bonuses are not that big of a deal. Pay the bills, and the entire money is gone.”

If people are not sticking to their budgets, are they practising healthy financial habits?

The simple answer to this question is yes. Most participants spend their money responsibly. Only 23% end up dipping into their savings, with even fewer using the Buy-Now-Pay-Later function to purchase beyond their means (15.9%). A small fraction (4.2%) may borrow money from family to afford the things they want during this time, but the huge majority (94.6%) will not cross this line.

What stands out is the fact that almost 95% of respondents adamantly avoid borrowing money to finance their purchases during significant sales. The underlying sentiment revolves around a desire for financial independence and a keen awareness of the potential strains on relationships associated with borrowing from friends or family. The prevailing consensus underscores a commitment to spending within one’s means and a reluctance to borrow for indulgences beyond their financial capabilities.

Conclusion

As consumers, it’s crucial to recognize the diverse spending behaviours and attitudes that characterise the end-of-year shopping period. Armed with this knowledge, we can approach the remaining days of the year with a sense of empowerment and mindfulness. Whether you’re eyeing that irresistible deal or contemplating a final year-end splurge for 2023, understanding your desires, setting clear budgets, and making informed decisions will ensure a financially savvy and satisfying shopping experience.

In conclusion, the end-of-year shopping journey is more than just a transaction; it’s a reflection of our aspirations, values, and financial wisdom. As we embrace the festivities and navigate the year-end sales, let’s do so with intentionality, ensuring that every purchase aligns with our desires and contributes to our overall financial well-being.