Ask Belle: Determining Clothing Budget

Aug 22, 2013

Hi Belle,

I’m wondering how you determine your budget for clothing, shoes, handbags, accessories and beauty products. Is each a percentage of your salary or do you simply spend whatever you feel like? I’m trying to get a handle on how much I should be willing to spend or not spend when it comes to these items. Thanks!


First off, I think that every woman should have a budget.  You should have a firm grasp of what you can afford to spend on necessities (rent, food, etc.) and extras (clothing, vacations, etc.) so that you can pay down debt, save for the future and live with fewer financial worries.  If you’re new to budgeting, this worksheet from The Washington Post can get you started, and articles from sites like Learnvest and WIFE can help motivate you.

As for how much to spend on clothing, most of the articles I found recommend a clothing budget of four-percent of your annual take home salary.  But I’m willing to sacrifice in other areas (fewer meals out, fewer trips, public transportation) in order to add more money to my clothing budget.  So I spend about seven percent of my salary on clothing.

How do I keep track of my clothes spending?  I link my credit card to my Learnvest account, which allows me to separate out my expenses by type.  The site keeps track of my spending by percentage and alerts me when I’m getting close to my limit.  Having that reminder that it’s time to rein it in really helps.  I also try to take one week off from buying anything but essentials each month.  I find it helps me focus my spending.

Also, I don’t spend money evenly throughout the year.  Most of my shopping is done in April/May and August/September when the new collections hit stores for the upcoming seasons.  So I budget more of my money for those times and less for months like February when there’s not much reason to shop.

When I was younger, I definitely racked up debt buying clothes and shoes.  Too much debt.  When I finally got a handle on my finances, I realized that no piece of clothing was worth years of accruing interest.  So I developed a rule of thumb: If I can’t pay off an item in full within 60 days of purchase, I don’t want it.  I also try to save up in advance for big purchases like a new suit, a great bag or some fabulous shoes.  Even if you can only save up half the purchase price, it makes paying it off that much easier.

A lot of my friends only carry cash when they shop.  It helps keep them on budget, limits impulse buying and gives them a greater sense of control.  And if they see something that they really love and want to pay off over time, they can always come back and get it later.

Lastly, if you’re trying to decide how much to spend on one type of item, that depends on your priorities.  I am much more willing to spend on items I can wear for years like coats, shoes and bags than I am on seasonal, trendy pieces.  And since I rely so heavily on dresses, I will spend more money on a dress than separates.  Figure out what you really like to wear and what will be worn the most to determine where to focus your spending.

So do you set a clothing allowance for yourself?  Any tips you’d like to share?

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  1. Katy says:

    I dont have a clothing allowance or a budget. I pay myself first (401k + auto savings deposit totals 20%), rent 20%, student loans 20%, and the rest is not allocated- winds up going to utilities, car insurance, etc. Whatevers leftover is available for clothes/food/travel/entertainment.

    Instead, I have item guidelines. I bought a $300 bag last year, so I won’t buy any bags this year. I only spend up to $250 on a dress, and then only if I’ll wear it lots. And I never get behind on payments. If I can’t put it on my debit card, or pay it off in full at the end of the month, I don’t buy it. Period end of story. There’s no item of clothing worth debt to me, even just for 60 days.

  2. Abby says:

    I use to track all my finances, as a recent grad. It’s free and is so helpful to know what you can and cannot spend. You’re free from guilt, but still on track.

  3. I use learnvest as well to track spending but I also record shopping purchases on a separate spreadsheet. I keep a running list of things I really want/need and try not to buy anything that isn’t on the list – this has really helped me curb impulse purchasing and really be more conscious of what I’m spending..

    Like you, I allocate about 7% of net income to shopping and spend less in other areas (no car, no loans, walk everywhere, etc) but I do think of my shopping budget as monthly. If I don’t spend all or spend more than the full shopping budget for the month the balance rolls to the next month. I also clean out my closet monthly and sell items I don’t wear anymore – the proceeds of these sales go in a separate savings account for investment purchases like nice bags/shoes.

    • Belle says:

      Consigning or selling old items is something that I do too. Then, I put that money either towards my loans or in savings. No need to let your closet fill up with things that you’re bored of, but other ladies could wear.

  4. CSJ says:

    For me, it’s also really important to make rules for myself about how I’ll spend my money within in monthly clothing budget. I try not to spend too much money on anything I cannot wear to work unless it’s going to be a staple item.

    • Belle says:

      I use the phrase, “I can’t spend X on something I can’t wear to work” a lot too. My casual wardrobe is mostly Gap or Zara, but you’ve got to put your money where you spend the most time.

      • Elissa says:

        Agreed. I spend most of my time at work, so most of the clothes I buy are for work, and I’m willing to spend more money on quality items for work.

  5. Cynthia W says:

    I’m with Katy – I pay myself first and take care of essentials and then there is money left for entertainment. My clothing needs are pretty well taken care of right now, so I mostly just budget for things that need replacing and/or updating.

    Most importantly – if I don’t have the money to pay cash, it doesn’t get bought. Period. I’ll put it on the card for consumer protection and points, but it gets paid off that month. The only things that are bought on credit are the house and the car – everything else is cash, unless I can borrow interest free.

  6. L says:

    Thanks for posting about this! I always wonder about how much other people spend on clothing. My clothing budget is almost exactly four percent of my take-home pay.

    Typically, if I overspend in one area of my budget, I’ll cut back in another area (usually going out). I may go a bit over four percent this year since in addition to my typical spending, I’ve been upgrading my athletic clothing wardrobe. But because I got rid of my car and started biking everywhere, I’m saving about $150/month since I no longer have to pay for gas or insurance.

    I don’t have a hard time limiting impulse spending online (in fact, the overwhelming number of options makes it tough for me to make a decision and buy anything sometimes!), but I do two things when I shop in person:

    I only shop when I need a specific item. I can’t just go shopping for fun, because I will buy something I don’t need.

    I only shop when I have plans later or shortly before stores are about to close. This means I can’t just aimlessly wander around Penn Quarter and Metro Center buying tons of stuff I really want, but don’t need.

  7. Whitney says:

    For interest free borrowing, you should consider PayPal’s “Bill Me Later.” It allows you to pay for any purchase over $100 for six months with no interest.

    I have recently used it to buy a nice purse and to buy a new suit. Both times I have made sure to pay off in well under the six month time frame. It allowed me to get these items earlier this year for a new job before the new paycheck came in.

    • Anna says:

      That’s a great idea! I love not buying until I can pay in full, but I’ve had a few jobs that don’t start paying for almost 8 weeks into work. If you are changing jobs this might be ok, but coming directly from grad school made it more challenging. An interview suit and a few pieces for those first weeks were important to have.

  8. s-p-c says:

    Good discussion – I don’t have a set budget, but generally look for sales (like filtering for dresses and shoes under $150 at, hunt in consignment shops (like Current Boutique in Old Town), focus on the items and colors I wear regularly, and try not to buy anything unless I am willing to donate or consign a similar item.

  9. B says:

    I’m 25, I own a home and I don’t have a credit card. If I don’t have the money right now, this month, I don’t buy it. I pay my mortgage, have a very small amount of student loan debt, put 20% of my paycheck into savings, and pay all of my utilities and home expenses first. Then I worry about groceries, gas and home improvement projects. After that, what’s left is discretionary for small trips, going out and clothing.

    My mom taught me that you should never put consumables on a credit card. That includes food, gas, going out, most travel (unless it’s your once-in-a-lifetime vacation, maybe), trendy clothing items, small home goods, etc. Once these things are gone, they’re gone, but you are left with the debt. It’s not worth it to rack up interest on gas you consumed two months ago. If you can’t pay for these things outright, it’s an awfully vicious cycle to get into to keep throwing them on a card. On the other hand, an investment item like a sofa, for example, you’ll have for years and maybe isn’t feasible to pay all cash for. If you put in on a card and pay for it over a year, you haven’t consumed it before it was paid off. Those are the kind of things worth having a credit card for.

    • SM says:

      It sounds like you are very fiscally responsible! But I will offer up the suggestion that putting consumables on a credit card actually makes sense as long as you are paying off the full balance each month. That way, its pretty much like paying cash for them but with the added benefit that you usually get 1% cash back on all your purchases. That’s generally what I do and I can redeem like 200 to 300 a year by doing nothing. The big caveat is that the bill has to be paid in full every month for this to be workable.

      • Belle says:

        You’re right that can be a great idea, but only for people who have self-control. A lot of people have a hard time keeping perspective when charging it. But if you can, then def. take advantage of the rewards.

  10. GingerR says:

    I think the must-pay-in-60 days rule is a good one. If you limit yourself to cash on hand you can end up with a wardrobe that’s full of little affordable treats and short on workhorse items. So a 2 month pay-off on things you’ll wear frequently, say work suits and dresses, makes sense. There isn’t anything wrong with affordable work wear, but essentials like wool suiting cost more than what a lot of us have to spare from one paycheck.

    • Belle says:

      I like 60 days instead of in the grace because it’s still attainable, but it allows me to buy a more expensive piece if I find a great sale or something I know I’ll get my money’s worth out of. For example, I love Antonio Berardi, but at $1500 a dress, who can afford that? I found one of his dresses on sale at Century 21 for $450. It was still a lot, but within the realm of possibility if I stretched my dollars in other places. True to my rule, I had paid it off 60 days later.

  11. I love this post the most out of all of your previous ones! This has been my biggest question for most all bloggers. As a blogger myself, I sometimes find myself making purchases with the intention of, “well, I can review it for the blog”. This has caused me to over spend especially when I REALLY didn’t need the item. As a college student, this is toxic. I really need to keep up with my spending habits if I really want to make any type of big purchases in the future. I wish I was more frugal and made saving a habit.

    • Belle says:

      Don’t play keep up with the other bloggers. It’s tough not to fall into that mode of thinking, esp. if you put photos of yourself on the blog. If you’re trying to blog and you’re on a budget, share with your friends. Try their makeup and borrow their clothes. People want to see your style and hear your opinion, but no one wants you yo go broke for it. If you borrow a friends clothes, that makes you normal and teaches your readers that they don’t have to keep up with the Joneses either.

  12. Beth says:

    Most financial planners recommend no more than 25% on housing, unless you have a mortgage in which case you can look at 36%; then you need health care and 15% minimum into retirement accounts. Then loans, which are a generally bad idea. Debt is not a good thing in most cases. After that you can prioritize between how you spend on food/meals out, clothes, vacations, etc.

    I am 28. My take-home after retirement contributions, taxes, and health care is about $46k. I generally save 25% in retirement accounts through work, an IRA, and taxable accounts deginated for retirement, and after mandatory expenses like housing and food, I put $1000 a month into savings (emergency/rainy day/life happens/vacations) and don’t let it go below the amount I would need to cover 6 months were I to lose my job. Then I shop as I want to without worrying about budget. I paid cash for my car after saving and saving, and paid off all student debt. So, I don’t have to worry about keeping to a particular number. If you put all your bills and contributions on autopay, and even savings deposits, you can pretty much spend what is left without worry.

    I spent 3 years in my mid-20s paying off debt, not doing tons of fun things, NEVBR shopping, and saving saving saving. It has brought a lot of peace into my life, removed anxiety, and given me the freedom to travel and spend on some luxury items.

  13. Vivian says:

    Thank you for covering this topic, Belle! I am a third year law student and budgeting was definitely on my mind these past few months when I worked as a summer associate for the first time (I spent a bunch of summers as that unpaid hill intern you sometimes channel). The firm paid us at the same rate as a first year associate so I thought the summer would be good practice. I have never used budgeting tools like Mint or Learnvest and found them a little intimidating. i decided to use a simple excel spreadsheet instead. I calculated my net pay for the summer then subtracted all of my required spending for the next year or so (summer rent/utilities, rent/utilities for my last year of law school, groceries, small percentage of tuition, etc.) and put this number–let’s call it my disposable income–in a cell in a far corner. I then made separate columns to track my spending (transportation, clothing, eating out, vacations) and made a cell at the bottom of each column for the totals. Then I went back to my disposable income number and made an equation to subtract out each of the total cells and placed it in a bolded cell. This way I could see how much of my disposable income remained as I entered purchases. I know I will have more monetary obligations once I graduate and get off the family cell plan/stop driving my parents’ car, and that this type of budgeting may not be suitable in the longterm, but I thought it was a simple way to get in the habit. I came in well under budget by the end of the summer. Watching my clothing column grow much faster than any other was enough to help rein in the splurging. Taking Bankruptcy Law and learning about the enduring hardship that comes with consumer bankruptcy was also enough to scare me out of spending more than I have.

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