You could go into a clothing store and easily drop hundreds of dollars on a single outfit. You could also go to a big box, discount retailer and buy three outfits for the same amount of money. The disparity in clothing prices is astounding when you consider factors like brand names and outlets.
In light of that, this post seeks to answer the question of how much you should be spending on clothing. Before we go any further though, ask yourself how much you spend. Be honest. The point is to help you figure out whether your clothing budget is too high or too low. You cannot do so if you are not honest about how much you spend.
Average Spend in the U.S.
A 2019 Credit Donkey report looked at sales data to determine that the average adult between the ages of 25 and 34 spends $161 per month on clothing. Adults between 35 and 44 spend $209 per month. Combine them and you get an average spend of $185 per month.
Do you spend that much? If not, how much more or less do you spend? What you actually spend compared to the U.S. average gives you a baseline for determining what your budget ought to be. Speaking of budgets, a What to Wear column published in May 2019 suggests that spending 5% of your income on clothing is appropriate. Spending that much isn’t hard according to The Stockist, a women’s and men’s clothing boutique in Salt Lake City.
Considering the Overall Budget
The next thing we want to do is look at clothing expenditures in relation to the overall budget. A general rule of budgeting is something known as the 50/30/20 rule. This rule states that you should spend 50% of your income on necessities like housing, food, and utilities. You spend 30% on non-essentials like entertainment and new clothing. The remaining 20% is saved and invested for retirement.
The necessities category includes items that are obviously non-negotiable. Housing is at the top of the list because it is the most expensive. The general rule here is that you should not spend more than 30% of your income on rent or mortgage payments. That leaves you 20% to pay for utilities, food, healthcare, etc.
How you doing so far? Are you covering all of your essentials with 50% of your income? If not, you have to make up the difference somewhere. It is better to make it up by cutting out non-essentials rather than not saving and investing. You save and invest for the future. If you don’t do it now, you will not have any money to live on when you retire.
Wants vs. Needs
Finally, consider your wants versus your needs. Let us say your child only has one pair of shoes. He eventually outgrows those shoes. He cannot very well go barefoot outside the house, so new shoes are a genuine need. They become one of those essentials you can’t ignore.
On the other hand, you have a closet full of clothes. That new pair of jeans that has caught your eye are something you want. They are not something you need. You will not be forced to go naked if you don’t buy them. Herein lies the key to the whole thing.
The average American might spend $185 per month on clothing. But is that really necessary? If the vast majority of clothing purchases are based on wants rather than needs, most of us could afford to reduce our clothing budgets and put the money we save into more important things.