How to Only Spend 5% of Your Income on Clothes Each Year



#1 – Check Your Budget 


If you don’t have a budget already – what are you waiting for? 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.


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. Maybe you only shop 1-2x per year. Just make sure your numbers are lining up on an annual basis.
  • Many times I get to the holiday season, need a new outfit for a party or something, and realize I’m out of money for the year – so I don’t shop.
  • It’s good practice for your overall, larger budget, but it also helps keep fast fashion crap out of your wardrobe.


#2 – Invest in Quality, Not Quantity



I LOVE this piece that talks about making fashion sustainable. And let’s face it: fast fashion is bad for the environment.


Even though clothes can see exorbitantly expensive, 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. 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.


#3 – 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 primarily search for second-hand luxury goods on Ebay, Poshmark, and The Real Real.

Honestly, I’ve gotten so many good deals from The RealReal and now it’s the main place where I shop. 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. FBL Readers can get 20% with my link.



Here are the other places I look when I’m trying to score clothes at a good price

  • TJ Maxx  & Nordstrom Rack- Now that TJ and  Nordstrom Rack have online shopping platforms it’s easier than ever to shop for the higher-end designer brands, like shoes that I love that rarely go on sale.
  • J. Crew & J.Crew Factory – While the quality of J. Crew has diminished somewhat in recent years, I can pick up a lot of “trendy” stuff for not a lot of money by shopping their sale section.
  • LOFT – I buy all my basics there – the tees and tanks that serve to ground my wardrobe that I usually only get one season of wear out of. But hey, they’re cheap, and the price per wear (given how much I wear them) is actually pretty low. They’ve also got great basics.
  • Lord & Taylor – Another department store where I love getting designer bags, shoes and boots at deep discounts during their off-season sales. They have some cheap, crappy brands in there, but when they discount the higher end brands they do deep percentages (like 50-75% off.)



#4 – Consign and then use the cash

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Each season, I’ll take what I no longer want to wear and put it into a cleanup bag with Thredup. Then, I can either use that money for store credit to get something new, or I take the Paypal cashout and add it to my clothing budget.

Another tip I like to give is entrusting my 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. (P.S. here are ten other automatic savings apps I like and use besides Qapital.)


#5 – Keep a running list


I also always try and keep a running list of clothing items (I keep this in Trello, like I do with all my business stuff) and it’s those items that I truly need.


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 three big reasons:


  • Keeping a list serves to keep me from overspending and also keeps the items I need top-of-mind. This way 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.


If I need 10 items…1500/10=150.00 per item. So that’s what I’m looking to spend per item (give or take.)


#6 – 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 for not a lot of money:

  • I’ve participated in clothing swaps
  •  I’ve shopped on Ebay
  • …And even tried a capsule wardrobe or two. (It was fun, but also not for me…)
  • 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), Thredup, and The RealReal.

#7 – 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 Michelle’s 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.

#8 – Shop Your Closet 



It might sound goofy, but sometimes you don’t really know what you already have. It’s been proven that people only wear about 20% of their closets (unless you’re a sworn minimalist!). 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, like, $600 on average per year.)

Doing a deep closet shop can be great for a number of reasons like saving money or 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!

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.


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