Setting and sticking to a clothing budget can be one of the most challenging financially responsible behaviors. In this article we outline how creating a clothing budget can help you get organized and actually achieve a more stylish look and closet.

Most financial advisors recommend that you not exceed 6% of your monthly take-home pay on clothing. Most estimates fall within the 4% to 6% range, which is subject to your personal financial circumstances. When we say take-home pay, we refer to net income. Net income for the purposes of this article is the amount you actually take home after deducting taxes, pension/retirement contributions, insurance contributions, etc.

Quick math

Keeping a budget | 40plusstyle.com

Say we decide to create a clothing budget based on a 5% plan. Let’s estimate that your take home pay comes in at $5000 a month. If we follow the 5% plan, this is what various shopping plans would look like over the year ($5,000 was multiplied by .05 to get the monthly budget amount):

  • Monthly: $250
  • Quarterly: $750
  • Bi-annually: $1,500
  • Annually: $3,000

So, if you opted to spend your budget monthly you would be limited to spending $250 a month. Every three months (quarterly) your budget would be $750. If you decide to shop seasonally (say Fall and Spring fashions), your set budget would be $1,500 twice a year. The option is also available for you to shop once a year, in which case your budget would be $3,000 per year for one giant shopping season. Of course, the option is there for you to develop a shopping frequency that works best for your lifestyle.

Here are some quick tips to help you on your path to a responsibly budgeted and stylish wardrobe:

1. Self-assess

Assess your finances | 40plusstyle.com

Take your other financial obligations and plans into consideration. For example, it might be more valuable (especially in the long-run) to pay off your credit card, save up for home repairs, or save up for that dream vacation to Aruba. Take these into account and adjust your clothing budget according to pressing and future financial needs.

2. Get organized

Tips on saving and how to spend for shopping | 40plusstyle.com

This only works when you begin to clear out your closet and take inventory of what you own and wear. Once you have discovered what you don’t wear, separate it into piles of clothing you can give away or sell (anywhere from yard sales to online platforms). Once this is accomplished, create a list of what you have and what you need for the best possible wardrobe. Possibly pursuing a capsule approach to your wardrobe comes in handy. For more on capsule wardrobes, take a look through our articles on capsule and minimalist wardrobes.

Keep track of your items and finances | 40plusstyle.com

Take care of your basics first, which is what you will build your closet around. Once that component is taken care of, proceed with looking at any staple items you might be missing out on. While it is entirely possible to look at a plethora of “wardrobe must have” articles, make sure you take your lifestyle into account. If you live a very casual lifestyle and hardly dress up for work, you might not need to invest in as many business casual looks as someone who spends most of the week in dresses, slacks, and skirts.

How to stick to your clothing budget | 40plusstyle.com

Once you have that component concluded, take a look at accessories you might need that will work well with most of the items in your closet. After that, you can assign levels of importance to various pieces and begin to plan out your purchases. Of course, always leave room in your shopping till for those unexpected purchases or big ticket items you might have your eye on.

3. Develop a system of keeping track of your expenses

Organize your budget | 40plusstyle.com

For some people handwriting their expenses out in a journal or notebook completely dedicated to their budgets will work great. For others, you might need a spreadsheet, google doc, or something similar. There are also a number of mobile apps, which can prove helpful (Mint, which connects to your bank account and alerts you when you’re reaching your budget, and PocketGuard)

4. Be flexible

How to set a clothing budget | 40plusstyle.com

If you can handle it, give yourself the flexibility to spend more or less each month if there is something you especially coveted. Subtract that overage from your next month’s (or whatever shopping cycle you are on) interval’s shopping budget. On the other hand, don’t feel compelled to have to spend that entire amount. Save for that particular purchase.

Quick shopping guide

If you are interested in investing in luxury clothing pieces but cannot afford the high price tag, there are plenty of websites that can cater to your price point. For gently used items consider websites such as The RealReal. For brand new and discounted luxury brands, online platforms like The Outnet are a great option. If luxury and quality basics are appealing (and the brand name matters very little), you can get a great deal at brands like Everlane.

For additional affordable shopping opportunities, check out our past article on the best affordable brands that still look expensive.

Do you budget for your clothing expenses? What are some “big ticket” pieces you are coveting this spring and summer?

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How to set (and stick to) a clothing budget | 40plusstyle.com

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