How Much Should You Be Spending On Clothes?

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

particular situation:

Housing: 20-35%

Taxes: 15-35%

Food: 15-35%

Clothing: 3-10%

Transportation: 6-20%

Entertainment: 2-6%

Savings: 5-9%

Miscellaneous: varies

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

allocate accordingly.

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