The 5% solution
Caroline Cakebread pinpoints how much of your monthly income you should put toward your wardrobe to keep your bank account looking as good as you do.
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.
But, in the real world, you need to set limits on month-bymonth spending on clothes.
According to at least one financial planner, you should be spending in the range of five
per cent of your monthly aftertax 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, five per cent 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 per cent to 20 per cent of your take-home pay should go toward paying o debt). That might not leave much for a sleek new coat.
Bottom line, five per cent 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:
The Meat & Potatoes Rule: This one comes from designer Michael Kors, who maintains that 70 per cent of your wardrobe should be stu 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 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. So, which one is worth the money? Exactly.