MJAAR

From Seasonal Saving to Sustained Investment: Breaking the Cycle of Festive Expenditure in Uganda

Dr. Arinaitwe Julius, Asiimwe Isaac Kazaara


Abstract

Background: Uganda's economic transformation agenda emphasizes household wealth creation and sustained investment, yet a persistent pattern of seasonal saving followed by festive depletion undermines these objectives. Despite increased financial inclusion rates reaching 58% by 2024, Ugandan households continue to accumulate savings throughout the year only to exhaust these reserves during festive periods, particularly Christmas, creating a cyclical barrier to long-term investment and financial resilience. Objective: This study examined the patterns, determinants, and consequences of seasonal saving and festive expenditure behaviors among Ugandan households, and identified effective strategies for transitioning from cyclical festive spending to sustained long-term investment practices. Methods: A mixed-methods approach was employed, combining quantitative household surveys with qualitative focus group discussions conducted from January to December 2024. Using multi-stage stratified random sampling, 1,850 households were selected across eight districts representing Uganda's four major regions, stratified by urbanrural residence and income quartiles. Statistical analysis proceeded through three phases: univariate analysis employed descriptive statistics to characterize savings patterns, festive expenditure levels, and household demographics; bivariate analysis utilized chi-square tests, t-tests, ANOVA, and correlation analyses to examine associations between household characteristics and key financial outcomes; and multivariate analysis employed linear and logistic mixed effects models with random intercepts for districts and communities to assess determinants of savings rates, festive expenditure, and investment probability while controlling for clustering and repeated measures, with interaction terms testing differential effects across subgroups. Results: Households saved an average of UGX 824,500 annually (14.2% of income) but spent UGX 612,400 on festive celebrations (10.5% of income), representing 74% of total annual savings. Christmas alone accounted for 63% of festive expenditure. Critically, 69.6% of households depleted their savings during festive periods, and only 33.7% made sustained investments. Bivariate analyses revealed significant variations by region (χ²=47.3, p

Keywords

Seasonal savings festive expenditure sustained investment commitment savings financial behavior
Metropolitan Journal of Academic and Applied Research

Cite This Article

Dr. Arinaitwe Julius & Asiimwe Isaac Kazaara (2026). From Seasonal Saving to Sustained Investment: Breaking the Cycle of Festive Expenditure in Uganda. Metropolitan Journal of Academic and Applied Research, 5(3). https://journals.miu.ac.ug/pages/article.php?article_id=255

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