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 less.