For Gwyneth Paltrow, an investment piece of clothing is a pair of Gucci loafers or a Chanel bag, just two of the items on a GOOP list of 10 essential pieces for your wardrobe. Buy everything on that list and you’ll shell out more than $20,000.
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But, in the real world, you need to set limits on month-by-month spending on clothes.
According to at least one financial planner, you should be spending in the range of 5 percent of your monthly after-tax pay on your wardrobe. So, if you’re bringing home $3,500 after taxes, your clothing budget should be $175/month. If you’re bringing home $5,500 a month, then you can bump your budget up to $275/month.
Remember: that’s per household. If it’s just you, go for it. If you’re a family of four, you’ll need to spread that money around.
Also, 5 percent is just a guideline – it’s assuming you’re debt-free. If you’re not, then repayment ought to be a big part of your budget (the rule is anywhere from 15 percent to 20 percent of your take-home pay should go toward paying off debt). That might not leave much for a sleek new coat.
Bottom line, 5 percent might be the perfect number for you. But if you’re feeling the pinch and want to curb your spending on clothing, here are some other rules to follow:How Much Should It Really Cost To Renovate A Kitchen?
The meat and potatoes rule
This one comes from designer Michael Kors, who maintains that 70 percent of your wardrobe should be stuff you wear every day (the “meat and potatoes” part): staples like basic pants, skirts, solid-colour tops, and jeans. Any shiny fabrics, patterns and accessories are the dessert: extras to help you jazz it all up. Allocate your budget accordingly, which should help you to cut down on impulse purchases.
The cost-per-wear formula
Cutting spending on clothes doesn’t mean buying on the cheap. You just need to make sure you get the most bang for your buck — hence the cost-per-wear idea. Spend $150 on a fantastic pair of jeans and wear them three times a week for two years (312 times) and that’s a cost per wear of 48 cents (not bad!). Buy a cheap pair of pants for $30 and wear them 10 times (when they fade, pill and lose their shape) and that’s $3 a pop. Which one is worth the money?
This post is part of Spend It Better, a personal finance collaboration between Chatelaine and MoneySense about how to get the most for your money. You can find out more right here.