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 last a lifetime. Since I used to have pretty bad spending habits, especially where fashion and clothing are concerned, 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 decent money and want to be well dressed, 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 plays? How do families handle clothing costs vs. single-income households?
I did a little research and digging to try and answer this question.
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How Much Should You Spend on Clothes?
Most financial experts say to keep clothing spend to around 5% of your take home pay for the entire family. So, take whatever your monthly pay is and multiply it by .05 and that is the MAX you should spend in a given month. Or multiply it out by twelve (since shopping for clothes is often cyclical/seasonal) and that is your maximum amount for the year.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 like most 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 types of purchases than 5% of 80k income for an entire family of four, but I like having a baseline and then adjusting from there. Also keep in mind everyone’s financial situation is different: some have more debt, or help from their parents, so it’s best not to compare your budget to others.
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…try to keep it to less than 5%.
I do want to say, however, that unless you’re doing a specific no spend challenge or making a concerted effort to shop less, it’s okay to spend some money. Fashion may be a luxury, but clothing itself is a necessity. If clothing makes you happy and you’d rather spend there than on travel, for instance, those are your choices. And that’s okay! I like a challenge and being a bit creative, so below are the tips I use to make sure I’m sticking to that 5% number each year.
How to Only Spend 5% of Your Income on Clothes Each Year
#1 – Check Your Budget
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.
You can also use new apps like Rocket Money to track your spending in certain categories.
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, particularly for habitual shoppers or those who keep an eye on the sales. But maybe you only shop 1-2x per year. Just make sure your numbers are lining up on an annual basis. (I track my clothing spend annually, and often break it up by quarter rather than monthly.)
- I find that shopping quarterly/annually is a good practice for your overall, larger budget, but it also helps keep fast fashion crap out of your wardrobe. Fast fashion is a major contributor to global warming, so if you can be more intention about your purchasing habits, you’re also helping the environment too.
How much do I spend on clothing? A quarterly math example
If I take home $80k per year, 5% is $4,000 annually.
That’s $1000 per quarter, or ~$300 in a month.
I do recognize this is A LOT of money, but if you’re in a family, that may not go far at all.
#2 – Invest in Quality, Not Quantity
I adore this postthat talks about making fashion sustainable.And let’s face it: fast fashionis really, really bad for the environment. I have workwear pieces bought ages ago that I only wear a few times per year (hello, pandemic and remote work), but I do have a few things I purchase season after season because they get a ton of wear (things like t-shirts, underwear, joggers, sneakers.)
Even though clothes can seem exorbitantly expensive these days 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. And more research in 2022 suggests that closets need to be even smaller than we imagine, if we’re going to limit climate change. (These researchers said each closet should only have 74 items.)
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.
Other times, the increase in price means the clothes are made of better quality materials and thus will last longer (if taken care of properly.)
Over time, you’ll find designers you can count on for quality, fit, and ones that vibe with your style and body type. The trick is to find these items at a discount and never pay full price. These are my favorite places to shop new designer clothes.
- The Real Real
- Rue La La
- Ebay
- Poshmark
- ThredUp
#3 – Try a Rental/Subscription Service
I didn’t really get into clothing subscriptions until after my son was born/the pandemic entered the chat. My size was fluctuating, I wasn’treally going anywhere, and so it made sense to rent pieces from time to time when special occasions/events did arise.
But then I got addicted to the savings, and the way I could always have something new. Plus, as a busy, working mother, I don’t have time to shop like I used to, so when I get something that I rented and REALLY love it, I’m able to purchase it at a discount because it is used. It checks all my sustainability and all savings boxes. I really can’t recommend it enough.
Click here to try out RENT THE RUNWAY with my referral link. You get 40% off your first month!
#4 – 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 know I have, especially during my shopping addiction days.)
I primarily search for second-hand luxury goods on Ebay, Poshmark, and The Real Real. I also like to buy items I rented and loved from Rent the Runway, and these come at a discount because they are used
Honestly, I’ve gotten so many good deals from The RealReal.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.
It’s easy to stay on budget AND get the clothes you want if you’re willing to get a little creative. Try my favorite retailer, TheRealReal for designer brands (with the tags) at up to 90% off. Use code REAL at checkout for 20% off.
#5 – Consign (and then save the cash)
Each season, I’ll take what I no longer want to wear and put it on Poshmark, which is a great marketplace for new and gently used clothing. Especially now that I’m a mom, and my son goes through clothing so quickly, Poshmark has been great for us to sell his clothes and then buy gently used items the next size up at a discount.
I can either use that money for store credit to get something new, or I take the Paypal cash out and add it to my clothing budget. Having a separate savings goal in an app (my favorite = Qapital) allows me to save up these bits and pieces of “cash” into one place for a bigger purchase later.
Another tip I like to give is entrusting Qapital or any of these other 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. Particularly if there’s an item I want and it falls outside of my budget.
My favorite money saving app is Qapital. While it does cost a monthly subscription (I pay $3/mo), it helps me save extra for travel, clothing purchases, and other special occasions by rounding up when I use my card. I love it so much and it is the only money saving app I use, year after year. Click here to get $25 try.
#6 – Keep a running list/inventory
I also always try and keep a running list of clothing items I need to replace or think would fill a “hole” in my closet (I keep this in Trello, like I do with all my business action items).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 a few, key reasons:
- Keeping a list serves to keep me from overspending and also keeps the items I need top-of-mind.
- It’s easy to have the list handy so, 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. For example: If I need 10 items…1500 quarterly allowance/10=150.00 per item. So that’s what I’m looking to spend per item (give or take.)
#7 – 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 on a dime.
- I’ve participated in clothing swaps
- I’ve shopped on Ebay
- I’ve tried a capsule wardrobe or two. Read my article on The Huffington Post style section for how I styled a maternity capsule wardrobe when I was pregnant.
- Try a good closet purge. I know it seems counterintuitive, but with fewer clothes in your closet, you’re able to see more of what you have, pair it with other things into outfits you love, and actually wear them. Often the answer to the problem “A closet full of clothes with nothing to wear…” is less.
- 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 – I especially do this now with all my son’s old clothing, kids really do outgrow them so fast!), Thredup, and The RealReal.
#8 – 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 our 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.
#9 – Optimize Cashback
By now, every financial brand and their sister has a cash back/cash rewards program. But the key to saving money when you’re figuring out how much to spend on clothing or how to lower your overall clothing spend is to pick ONE APP and stick with it, that way your rewards stack up into something significant.
It is less exciting if you have $40 with honey, $40 with Ebates, $40 with CapitalOne…you get it.
If you have a cash back rewards credit card? Then great. You can use that too.
If not, Honey is a great option and the one I use most frequently. It’s a chrome extension that searches for coupons for you, but you also get a certain amount back when you shop with Honey (called Honey Gold). In the olden days, you could only redeem it for gift cards, but now they have it where you can also get PAYPAL cash back.
Click here to use my link to join Honey. At the end of the year, I use all of my points for gift cards to do holiday shopping, but this also works if you wanted to save them to shop for new clothes too. Take it on as a challenge to try and get your clothing spend as low as possible and see how you do.
#10 – Old Faithful (Shop Your Closet)
It’s been proven that people only wear about 20% of their closets. 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 an average of $600 per year. Think of what you could do with that money)Doing a deep closet shop can be great for a number of reasons like saving moneyor living a more minimalist lifestyle. I love to do it for three main reasons:
- 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. Cluttered space really does equal a cluttered mind.
#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, and 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.
Wrapping Up
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.”
