It’s a question that I receive from time-to-time from
people trying to get a handle on their clothing
expenses. Whether you have a lot to spend or a whole
lot less than you’d like, there are a couple of ways
to go about figuring how much of your budget you
should be allocating to clothes.
1. The Historical Method
If you typically keep track of all of your expenses by
hand or by computer, you can usually find this number
with very little effort. Simply tally the amount
you’ve spent by year for the last few years and see
how they compare to each other.
If your spending habits are pretty predictable, the
amounts will probably be similar for each year. If
you’ve had a job change that impacted your wardrobe
requirements (got a promotion, went to uniforms, left
Wall Street to start a goat farm in Vermont)-or had a
teenager enter or exit your midst-you’ll no doubt see
the impact in your clothing expense history.
Simply determine how long the impact will be felt
(from here on out, for three more years, etc.) and
adjust the rest of your budget accordingly. If the
number seems high or low in proportion to the rest of
your income and expenses, you may need to adjust your
spending habits to meet your business and image goals.
2. The Percentage Method
For those of you who don’t typically keep records or
who want a more definitive answer, you may want to
look at the percentage method.
The percentage method is where you allocate a certain
percentage of your income to specific expenses.
Because these can vary wildly depending on your
marital and dependent status, work environment, local
cost of living, etc., use these AS GUIDELINES for
forming your budget, then adjust as necessary for your
Now before you use this as a permission slip of sorts
to head to your favorite store to spend 10% of this
year’s salary on clothes, there are a couple of things
you need to keep in mind:
1. Your Lifestyle
If you wear a uniform to work, work at home or in a
casual environment, are retired or are getting ready
to retire, you can probably get by on a 3-5% clothing
budget (or less).
If you are regularly photographed, are a public
official, speak, consult, or charge a lot of money for
your products or services, you will need to spend more
on your wardrobe, typically 7-10%.
2. The Needs of Each Dependent
If you are married and raising children, you’ll need
to spread the budget between everyone in the
household. So as the number of bodies to clothe goes
up, the amount to spend per body goes down.
Now while your teenager (or pre-teen) will no doubt
argue that she should be allocated the bulk of the
budget to buy the status symbols of her peer group,
don’t do it; the distribution should be based on each
person’s lifestyle requirements. Look at the wage
earners’ needs first, then work your way through each
person in the family.
So if Dad does computer programming for a hospital,
for example, Mom sells diamonds to socialites, Junior
is heavily involved in sports, and little Susie is the
scholarly type who prefers books to friends, then the
allocation might goes as follows:
*Mom should spend the most (sells a high dollar product)
*Then Junior (school clothes, sports gear and uniforms)
*Then Dad (casual, low-profile work environment)
*Then Susie (school clothes, a few casual clothes)
Make sense? Determine the needs per person, then
Whatever you do, don’t scrimp on your own wardrobe to
dress your kids “to the nines.” While this is common
practice in a lot of families, it’s counterproductive:
the most money goes for the clothes that are worn the
least and that have fleeting impact, while the least
amount goes for the clothes that are worn the longest
and need to have the greatest impact.
So knowing that the more polished you are, the more
money you make and the less polished you are, the less
money you make, don’t sacrifice your own image goals
to buy expensive clothes for your kids that they’ll
outgrow in six months. Instead, put your own needs as
the wage earner first, increase your income, and
you’ll have more money to spend on clothes for
everyone. Make sense?
3. Your Existing Debt Load
Now this whole spending plan assumes that you operate
your household on a cash basis, meaning NO DEBT. If
you’re carrying a lot of debt-or even a little-beyond
your mortgage or car note, then you need to reduce
your expenses to bare-bones minimum until you’ve
satisfied your creditors first.
So if you’re still paying off last year’s fall
wardrobe or that spending spree you went on after you
broke up with Mr. Wrong, don’t add to your strapped
finances by assuming that these spending percentages
are etched in stone. They’re not. Spend low while you
pound away at the debt, then re-adjust as necessary
once you’re back in the black.
So what’s the bottom line?
If you commit yourself to staying within your budget,
you’ll spend less, make wiser clothing purchases,
teach your kids how to handle money appropriately, AND
be able to sufficiently fund your retirement to dress
well for years to come.
So how much money should you be spending on clothes?
Enough to help you look good, feel good, boost your
income, and meet your financial goals. No more, no