How Much Money Should You Be Spending On Clothes?

shopping for clothes

Shoppers browse the racks at an H&M in New York City | Drew Angerer/Getty Images

You’re longing for the new “it” bag or that pair of cute boots, but can you afford it? When it comes to knowing how much money is too much to spend on clothes, many people don’t have a clue.

The typical American household spent about $1,900 on apparel and related services (such as dry cleaning and shoe repair) in 2015, according to data from the Bureau of Labor Statistics, or roughly $158 per month. With an average pre-tax income of $69,629, that means people are spending about 2.7% of their total earnings on clothes.

According to experts, we’re actually pretty conservative with our fashion budgets. “You should spend 3% to 5% of your income on clothing,” Jae Scott, a luxury stylist and image consultant, said. “However, us fashionistas spend a little more, say 7%.”

Someone who takes home $4,000 a month and devotes 5% of her income to fashion would have about $200 a month to spend, or $2,400 per year. If she pushes her budget to 7%, she’d have $280, though she’d also want to trim discretionary spending on things like entertainment and dining out to make up the difference.

The 5% guideline is a good rule of thumb, but it’s not hard and fast. If you’re deep in debt or behind in your savings, you should restrict your clothing spending to necessities and skip the splurges. If you don’t spend much on extras like travel and dining out, you might be able to afford a few more pairs of designer shoes.

woman carrying chanel shopping bag

A woman carrying a Chanel shopping bag | Ker Robertson/Getty Images

To manage your spending, Scott suggests having separate accounts. Funnel money for rent, bills, savings, and charity into dedicated accounts, so you know your financial bases are covered. Then you can divvy up whatever is left over. Some might go into a “play” account for fun, spur-of-the-moment buys, while another portion is set aside for big-ticket “nice-to-have purchases like your Chanel bag or Chloe boots,” she said.

Careful budgeting is key to keeping your clothing budget under control, especially if you’re a fashion maven who’s always on the hunt for the next hot item or great bargain. A closet full of unworn clothes with the tags still on is a sure sign you’re spending too much money. So is using a credit card to cover your shopping sprees, unless you’re able to pay if off right away.

How can you balance the desire to look good with the need to stick to a budget? Zero in on a style that works for you and you’re less likely to get distracted by of-the-moment trends. Then, focus on building a wardrobe you actually wear. You’ll also feel more confident buying higher quality but more expensive items that will last for years.

“Defining your style will guide the pieces you buy. Because otherwise you’re just shopping blindly and wasting cash in the process,” Patrice J. Williams of Looking Fly on a Dime wrote.

Clearing your closet of “What was I thinking?” items has another benefit – it can bring in some extra cash. Sites and apps like Tradesy, ThredUp, and Poshmark let you list your unwanted clothing for sale, so you can clear out pieces that don’t work for you and replenish your clothing budget in the process. At the same time, you can find great deals on other people’s castoffs.

30% off sign

A sign advertising a sale at a clothing store | Spencer Platt/Getty Images

Fashion addicts can also sign up for Glamhive, where you can share your favorite looks and shop the styles of other users. When you make a purchase or share one of your own photos, you’ll earn points that can be redeemed for gift cards at stores like J. Crew, Nordstom, Target, and Zara.

Using sites like Glamhive to browse other people’s looks can also help you “find new ways to style clothes you already have,” Stephanie Sprangers, Glamhive’s CEO, said. “Sometimes your new look is already in your closet or just needs one key addition to keep you on trend.” Shopping your closet in this fashion is a tried-and-true way to refresh your look without breaking the bank.

Once you’ve settled on your own personal style, you can narrow your shopping focus and concentrate on finding bargains. If you prefer to shop at certain stores and know your size, you can jump on online deals and be fairly confident the items will work for you, Paul Moyer, who writes the Saving Freak blog, said. Combine sales with additional coupon codes and cash back from sites like eBates and you can get “as much as 90% off once you stack all the savings and cash back on top of each other,” he added.

Proof, perhaps, that you don’t need to spend a million bucks to look like a million bucks.

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