How much should you spend on clothing?

Written by
Peter Dunn

"You look like a million bucks!" - A friend of yours complimenting you on an outfit that you love.

Clothing, whether you like it or not, is a necessary evil. In order to walk out your front door, go to the grocery store, and go to your job, you need to hide your genitals. Laugh if you like, or stop reading if you are offended, but it's the truth. Clothing, from the very beginning, was to meant to cover your "areas." Some people feel compelled to do this with style and panache, while others choose to take a utilitarian approach. Neither approach is right or wrong; they are just different philosophies. This post is for those that enjoy looking nice. If you don't care, then you don't care. I'm not judging. You just don't care.

What you might not realize is that even if you care, you may not have the right to care. If you aren't in a financial position to care about clothing, then whether you actually care or not, is trumped by your inability to do anything about it. To some degree, this is the same way I feel about smoking, drinking, fine dining, or art. Arguably, they are all vices. Whereas clothing is more essential than tobacco usage and alcohol consumption, it's your financial stability, or lack thereof, that should truly guide your decisions on all accounts.

But I digress. Back to clothing.

Call me shallow and clueless, but I'm convinced that personal style is important. This doesn't mean that you have to spend like a moron to complete your look. I just think how you present yourself is very important, especially in a professional setting. Recently, Harris Interactive conducted a survey of more than 500 HR professionals. The survey revealed that 90% of HR pros believe being well groomed is key to making a strong first impression and setting yourself apart from less tidy competitors. When I see someone with cool shoes, cool glasses, or a nice dress, I don't think, "Wow, those are expensive." I think, "Wow, they care." I happen to think that your business/career wardrobe is an investment. But I think that you should plan your purchases wisely. This post will help you do that.

The Numbers

Pete the Planner's Ideal Household Budget allocates 5% of your household income to clothing. This is assuming that you live in a debt-free house. It's much much harder to allocate 5% of your income when you are still hypothetically paying for that great handbag that you bought last March. Here's what 5% of some different incomes looks like:

$40,000 gross is about $28,000 net. Clothing budget $1,400/yr

$60,000 gross is about $42,000 net. Clothing budget $2,100/yr

$100,000 gross is about $70,000 net. Clothing budget $3,500/yr

$150,000 gross is about $105,000 net. Clothing budget is $5,250/yr


What's included in the clothing budget?

Everything. Clothes for you. Clothes for your kids. Clothes for your spouse. Workout clothes. Work clothes. Casual clothes. Bridesmaid dresses. Rental tuxes. Dry cleaning. Clothing repairs. Shoes. Handbags. More shoes.

You may have been excited by the raw numbers, but the "what's included" section may have brought you back to earth. Like I was saying, this requires planning and forethought. The first step in my opinion? You MUST take care of your current clothing.

Tips for making clothing last longer

  1. Clean, polish, repair- Grandpa Dunn always said, "You will take care of your bike the way you take care of your car." He meant that you must take care of the things that you buy, no matter the cost.Do you launder your clothes correctly? Do you regularly clean shoes and bags? Do you repair shoes and clothes when they are broken? You should do all of these things. Don't treat your clothing poorly. You spend 5% of your budget on it!
  1. Add to your rotation- I used to have only one good suit. It was wearing out quickly because it was doing all the work. I bought another suit that helped split time with my original suit. This extended the shelf-life of the first suit and helped me maintain the new suit. I eventually added another suit, and so on and so forth. All of your suits don't have to be high end. Hell, none of them have to be high end. But you should probably read tip #3.
  1. Sometimes quality matters- Some clothes are crap. This isn't me being a jerk. This is me being a realist. Some clothes look great but are made poorly. They will get you by in a pinch. Sometimes it makes sense (when your budget calls for it) to buy business formalwear from a "warehouse" type store. However, I believe that you can get more use and better effect from a nice clothing store. I like to support the local designers in my town. One of my favorite places for high-quality clothing at great prices is J Benzal. (Check 'em out. They have a great online store.)

Starting from scratch can be intimidating

Let's say that you are starting your first job. Or better yet, let's say that you decide that you want to kick up your style a notch. How should you get started? Can a person making $40,000 actually build a wardrobe? It takes strategy. That's why I'm called Pete the Planner. I plan EVERYTHING.

Cheap, good looking stuff is the key. Some of my favorite stores, for men and/or women, are Uniqlo, H&M, and Gilt. Make a list of things that you need, and then use sales to your advantage. Buying things on sale is great when you actually need what you are buying. For gents, you need one or two suits, five dress shirts, five to seven ties, a pair of khakis, a pair of black pants, a pair of brown shoes, a pair of black shoes, a brown belt, and a black belt. That's it. That's all you need to get your wardrobe started. Ladies....I'm not even going there. However, I would love for you to leave comments on what you find to be the equivalent of the men's list above. What are the essentials?

The bottom line is that you need to plan your clothing purchases. If you need to spend more than 5% of your take-home pay, then cool. Just spend less on some other budget category.

Final thoughts and tips

I spoke with Nikki Sutton (left), interior designer and fashion advocate, she is easily one of the most stylish people that I know. But while her look is distinct and powerful, it doesn't scream "I just dropped thousands of dollars on clothes."

She feels quite strongly about clothing's role in her career, "My outfits influence how I feel about myself, how others perceive me and most importantly, provide me a daily opportunity to be creative, to succeed and to fail. I think of my clothing purchases as investments in my personal brand."

She's right. Caring about how you look is important. It's not vain. And it's not stupid if you do it within your budget. Nikki shops on a budget, "That sweater may have only cost $20 however, by NOT buying it, I mentally reserve that $20 to put towards a pair of bada$$ shoes I simply can not live without. Actually, I weigh everything I buy against the latest pair of shoes I can't afford: If I don't go out to eat tonight, that's $30 I could put towards something I have been wanting." That's just smart. The Pete the Planner Ideal Household Budget encourages you to move the pie pieces around. Make choices. Don't just say yes to everything.

Bonus tip: Buy clothes that fit. A well-fitting, tailored suit, shirt or pair of pants can make all the difference in the world. Clothes that fit don't cost you more money. And if you can't find something that fits the way it should, then find a good tailor. Many dry cleaning places will tailor your clothing for a reasonable price.

The main takeaway is simple: don't ignore this seemingly simple budget category. Although clothing should only account for about 5% of your budget, it's quite a challenging process to make sure that you arrive at that 5% safely.

Step up your financial wellness game.

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