When it comes to spending money on clothes I’m all over the map: a former shopping addict who now favors more thoughtful (read: more expensive) items that will last a lifetime. Since I used to have pretty bad spending habits, but am now earning more I'm always hyper aware of how much I should spend on clothing. Because of my history, I always worry I'm spending too much.
So, what's the baseline? What's the appropriate amount to spend on shopping if you make okay money but want to be budget conscious? What's the hard and fast rule for spending limits when it comes to clothing – for both work and play? How do families handle clothing costs?
I did a little research and digging to try and answer this question.
How Much Should You Spend on Clothing?
Most financial experts say around 5% of your budget.
So, take whatever your monthly pay is and multiply it by .05.
For example, Suzie takes home $3500 per month after taxes. She should (in theory) spend no more than $175 each month on clothes, or $2100 a year (For those who like to shop just 2-3 times each year, like Black Friday or offseason for the best deals, break your amount down by quarter or every other month.)
What does the research say is the average clothing cost per month for most people?
There's a difference between what people should be budgeting for clothes and shopping, and what actually gets spent. Depending on where you look, the answer to how much people spend on clothing (on average) varies.
- The average person spends around $161 per month on clothes – women spend nearly 76% more than men do on clothing in a year.
- The average family of four spends around $1800 per year on clothes, with $388 of this on shoes
From Prisoners of Class:
- Women spend (on average) between $150-$400 per month on clothing.
- It is estimated a woman will spend around $125k on clothes in her entire lifetime.
Why I Like the 5% Clothing Budget Rule
Who What Wear has a great article on how to stretch 5% of your monthly income broken down by income. What I really like about the 5% number is that it scales depending on your income. Of course, 5% for a single woman on a 90k salary means different purchases than 5% of 80k for a family of four, but I like having a baseline and then adjusting from there.
- If you have a job where you are on the road a lot and giving professional presentations, perhaps you spend more.
- Maybe you’re a fashion blogger, maybe you spend more (or less depending on if you receive items as gifts or for you to review).
- Say you’re a minimalist, you may max out your budget, but only come home with a handful of items each year that will last a lifetime.
The point is – don’t let the number define you. However, if you are on a tight budget, low salary, or are contributing to other financial goals ….like debt payoff, for example…don’t spend more than 5%.
Unless you're doing a specific no spend challenge or trying to shop less, it's okay to spend some money. Fashion may be a luxury, but clothing itself is a necessity. Stick to the tips below to assess how to make your monthly clothing spend stretch further.
How to Only Spend 5% of Your Income on Clothes Each Year
#1 – Check Your Budget
If you don’t have a budget already – what are you waiting for? A budget should always be your first step in finding out how much “play money” you have to shop, dine out, or do any other fun stuff. The 50-30-20 method is my favorite way to start.
The important part about creating a budget is that it will give you a hard limit for your spending. You shouldn’t be sacrificing meals to buy a new dress, and if you’re sticking to your budget you won’t have to.
- The per month number is just a guideline. Maybe you only shop 1-2x per year. Just make sure your numbers are lining up on an annual basis.
- Many times I get to the holiday season, need a new outfit for a party or something, and realize I’m out of money for the year – so I don’t shop.
- It’s good practice for your overall, larger budget, but it also helps keep fast fashion crap out of your wardrobe.
If make $100k per year, 5% is 5k.
That’s $1500 per quarter, or $500 in a month.
This is A LOT of money, but if you're in a family, may not go far at all. Also, it feels like clothing only seems to get more expensive.
#2 – Invest in Quality, Not Quantity
Even though clothes can see exorbitantly expensive, investing in lifelong pieces (especially once you hit your mid-20's) can actually be the smarter money move. There's an old British saying, “Too poor to wear cheap clothes.”
Instead of looking at the ticket price, think in terms of “price per wear.” If a T-Shirt costs $100, but you wear it twice each week, then the item will “pay” for itself by the end of the year.
A study in the UK found items of clothing are worn an average of seven times. If you're someone who likes to update fashions frequently, it may be better for you to spend on cheaper items and only really splurge on items you'll know you can wear year after year: bags, shoes, and coats.
#3 – Buy Secondhand
This is a biggie for me. To save money and be more eco-conscious, I often buy second hand when I can — most of it BRAND NEW with the tags on. You wouldn't believe how much clothing gets donated or consigned with the tags still attached (and I'm willing to bet you've given away an item or two with the tags attached.)
I primarily search for second-hand luxury goods on Ebay, Poshmark, and The Real Real.
Honestly, I’ve gotten so many good deals from The RealReal and now it's the main place where I shop. I recently bought a pair of Diane Von Furstenberg pants that everyone compliments for $75. They came unworn, with the tags and normally retail over $300. FBL Readers can get 20% with my link.
Here are the other places I look when I’m trying to score clothes at a good price
- TJ Maxx & Nordstrom Rack- Now that TJ and Nordstrom Rack have online shopping platforms it's easier than ever to shop for the higher-end designer brands, like shoes that I love that rarely go on sale.
- J. Crew & J.Crew Factory – While the quality of J. Crew has diminished somewhat in recent years, I can pick up a lot of “trendy” stuff for not a lot of money by shopping their sale section.
- LOFT – I buy all my basics there – the tees and tanks that serve to ground my wardrobe that I usually only get one season of wear out of. But hey, they’re cheap, and the price per wear (given how much I wear them) is actually pretty low. They’ve also got great basics.
- Lord & Taylor – Another department store where I love getting designer bags, shoes and boots at deep discounts during their off-season sales. They have some cheap, crappy brands in there, but when they discount the higher end brands they do deep percentages (like 50-75% off.)
#4 – Consign and then use the cash
Each season, I'll take what I no longer want to wear and put it into a cleanup bag with Thredup. Then, I can either use that money for store credit to get something new, or I take the Paypal cashout and add it to my clothing budget.
I'm all the time doing this – trying to make my spend a “Net Zero”, especially when it comes to those lovely little extras like clothing and Sephora purchases.
Another tip I like to give is entrusting my handy automatic savings apps to save up money FOR me in a separate account. Then when I want to do some shopping, it’s already “paid” for in a sense, and I can keep the money off my credit card.
I saved $1000 in 45 days in this challenge using savings apps, although it was for an emergency fund and not clothing. Still, whatever the goal, it’s fun to save up first and then shop without any guilt. (P.S. here are ten other automatic savings apps I like and use besides Qapital.)
#5 – Keep a running list
I also always try and keep a running list of clothing items (I keep this in Trello, like I do with all my business stuff) and it's those items that I truly need.
For example, when a pair of my favorite yoga pants ripped, or when I wear out a pair of boots, I add in replacements on the list. After doing a closet inventory, I'll add things to list as well, some practical (like a pair of snow boots) and others more trend driven, like a great pair of white jeans for Spring.
I always keep a clothing list for three big reasons:
- Keeping a list serves to keep me from overspending and also keeps the items I need top-of-mind. This way when I do spot a good sale I can act (guilt-free.)
- This helps me ensure I'm not buying multiples of items I already own, which I am SUPER prone to do.
- After I've taken inventory of what I “need” to get for the season, I take the number of items and divide by my total clothing budget for the month or quarter by that number.
If I need 10 items…1500/10=150.00 per item. So that’s what I’m looking to spend per item (give or take.)
#6 – Get Creative
There’s more than one way to get stylish clothes on the cheap. I’ve done many of the following in order to get cute, new clothes for not a lot of money:
- I've participated in clothing swaps
- I’ve shopped on Ebay
- …And even tried a capsule wardrobe or two. (It was fun, but also not for me…)
- I’ll also mention ….again…. how easy it is to get second-hand items of good quality from places like Poshmark, (where people can sell directly via the mobile app), Thredup, and The RealReal.
#7 – Try a No Spend/No Shopping Challenge
I'm a big fan of experimenting with new routines to whip our finances into shape and learn more about ourselves and our spending habits.
Having a no-spend challenge for a month or even a year-long shopping ban, (read Michelle's post on that here, or follow Cait's TWO YEAR LONG shopping ban here) can be a great way to take the focus off of your closet, and onto your finances and furthering your financial goals.
#8 – Optimize Cashback
When I was doing my $1000 in 45-day challenge, I got hooked on using Ebates for myself. Essentially, by using the extension, I saved money every time I shopped online (even when reordering contacts, or sending someone a bouquet of flowers!).
You get paid with Ebates four times a year. Every time I get paid, I deposit the money into my f*ck off fund, but you could use the cash for whatever you want: clothes, shoes, travel.
Same goes if you get cash back on your credit card purchases. Many people just use this as a statement credit, but if you save it up all year long, you could have a nice portion of your 5% clothing budget taken care of by the end of the year. The main thing is to try and optimize your spend at certain retailers, on double point days, or using only one platform/service.
#8 – Shop Your Closet
It might sound goofy, but sometimes you don’t really know what you already have. It's been proven that people only wear about 20% of their closets (unless you're a sworn minimalist!). Information from a Credit Donkey survey states over half of women don’t use 25% of their closet (FYI – this is the equivalent of wasting, like, $600 on average per year.)
- It cuts down on the clutter in my closet, so I can actually see and make use of my outfits.
- It gives my clothes a nice, even wear.
- Everything feels new again because I haven't seen it or worn it in six months!
I “closet shop” a little bit different than most people and what you’ll see below varies from traditional “how to shop your closet” advice.
With that said, I'm super fond of my method because it works well for me.
My closet shop method takes place on a bi-annual basis – just twice a year. Most of it is around packing and unpacking the items. This sounds crazy. But it really works and rotating your clothes means you’ll never tire of them.
#1- Start By Taking an Inventory of Your Closet
You’re familiar with the #Kondo method for clothes? You know, everyone takes everything out of the closet and puts it in a big pile and then decides what should go back in based on whether it sparks joy or not?
This is fine, but when I say take inventory, I mean look at it from an outfits perspective. What are you missing that would help you wear items you already own (and love – that's important) in a new and exciting way?
#2 – Pack Away Seasonal Items
Without. Fail. I pack away my winter wardrobe and then the next year when I swap my closet over again, I see things I completely forgot I had.
“Out of sight, out of mind” really, really rings true when it comes to items in your closet.
I do a bi-seasonal rotation. I have a Spring/Summer wardrobe and a Fall/Winter one, and also shoes for both. It goes a little something like this:
- At the end of every season, I ceremoniously pack away the out-of-season clothes and really don't remember them until I unpack them again the next season. It feels like I got a brand new wardrobe when really I didn't.
- I put them in boxes and stash them out of sight either in my closet or in another part of the house entirely.
- Sometimes if I have the box it came in or some pretty tissue paper, I wrap it up as if it’s new (or nearly new) and it feels like a nice treat in a year when I unwrap the items again.
- Storing them properly is also an excellent way to ensure your clothes stay in good condition during the offseason.
If you don’t have a spare closet, that okay. Make it work. When I lived in NYC I got one of those under bed storage boxes and put my clothes in there – just so you're keeping everything separated out from the items you wear daily.
#3 – Tag “Borderline” items and pack those away, too.
I tag a few “borderline” items that I know didn't get much wear before I pack them away. Usually, I just put a post-it on it.
If something that I've tagged from last winter doesn't get worn again during the following one, or I decide I’m really “over it” the next time I switch out the clothes in my closet, I donate it or try to resell it.
As a bonus, packing and unpacking for each season also allows me to inspect my clothes more carefully than I would if I just left them in the closet all year long. When was the last time you really looked at your clothes, like, really inspected them for holes and ripped seams?
Sometimes if I have a “borderline” piece, i.e. something I haven't worn in six months that I still love or feel an attachment to, I'll take it out for a spin with something I've never worn it with before, just to see if I feel the same way about it. Or see if I can make it “work” with my current closet items.
Often, it feels like I'm wearing something new, even when it isn't. If the outfit rocks, I'll keep the piece and wear it again. If it doesn't, I'll donate it.
#4 – Purge Without Question or Regret
Rips, tears, and stains? Throw away those items (no matter how much you love them) or donate them to goodwill.
And I’m serious – be RUTHLESS. Things like this really bother me when I spot them on my clothes. If you find something like this, either make plans to repair it or get rid of it.
I love how Marie Kondo positions this. Instead of “What do you want to keep?” she asks, “What do you want for your future?”
Do you really want a sweater with holes in it for your future?” No. You don’t.
By having clothes that are in great condition – no matter if it’s old, second hand, or whatever – you’ll always look neat and tidy, which is half the battle of looking pulled together anyway.
#5 – Get a process for your clothing rotation
Are you bad about wearing the same things over and over again? Me too. So, I intentionally hang things I've worn in the back of my closet and keep the unworn items at the front.
When planning my outfits, I try to make them out of items so everything gets worn. It doesn't really matter how you set up the rotation, (here’s another great tutorial) just that you find something that works for you.
Really, I wrote this article about how much to spend on clothing because I’m fascinated by the way people spend their money. I held this fascination long before I started blogging about personal finance. Of most interest to me is how real women spend their money on things that are almost mandated for us to consume: clothes and beauty products.
I'm tired of feeling guilty over what I spend on clothes in a month. But, I figure as long as I stay inside of my budget…I'm doing alright. After all, as my friend Stefanie O'Connell would say, “It's not frivolous if it serves you.”