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How Do Clothes Fit into a 50/30/20 Budget?

May 23, 2020 by shesgotcash

Woman budgeting for clothes

Budgeting is tedious. And budgeting for clothes? Too limiting. Some might even say it’s awful, something worse than listening to cats fight. But now, more than ever, is the time to make a habit of setting caps on your spending and living into those caps. If not because you’ve recently lost your job, then because the economic outlook is incredibly uncertain. And the steps you take to get more conservative financially today can benefit you for years to come.

While there are apps that’ll help you track your spending, the hardest part of budgeting is figuring out how much you should be spending on different things. Knowing that you spend $800 monthly on food, for example, isn’t helpful unless you also know that a $500 monthly grocery bill is your target.

That’s why I like the 50/30/20 budget. It’s a simple framework you can use to evaluate your spending today and make an action plan for the future.

What’s the 50/30/20 budget?

Woman budgeting for clothes

The 50/30/20 budget does not take away your right to indulge. That’s one of the things I love about it. The framework allocates a healthy portion of your income to discretionary expenses. It also limits your essential bills to 50% of your pay — which gives you tons of flexibility, particularly in tough times. Considering that unemployment income typically replaces about 40% of your pay, living into a 50/30/20 budget gets you close to surviving without credit cards if you lose your job.   

You can find tons of information on the 50/30/20 budget online, but here’s a quick overview. You start with your take-home pay and add back your retirement contributions. The sum is your baseline income. You’ll divvy up that income into three buckets as follows:

  • 50% for essential expenses. This includes rent or mortgage, utilities, food, insurance, prescriptions, gas for required transportation, and minimum payments on your credit cards.
  • 30% for discretionary spending. Sorry, but your cable bill is discretionary. So is your gym membership, vacations, salon visits, non-essential groceries like soda and booze, and — yes — clothes, shoes, and beauty products.
  • 20% goes towards savings and debt repayments. Your retirement contributions get counted here, along with credit card payments above the minimums, and emergency fund savings.

I can guess what you’re thinking right now. How the heck do I get my essential spending down to 50% of income? If you live in New York or Southern California, your rent alone might be close to 50% of your pay. There’s no easy answer here. Simply put, you may face tough choices to make it work. You could downsize or move to a cheaper neighborhood. Or, more realistically, you could hold your lifestyle steady for a few years even as your income rises. Avoid all expensive lifestyle changes — like buying a fancy car — until your income rises to two times your essential expenses.

Budgeting for clothes in 50/30/20

Now, for the question at hand: Where does my love for clothes fit in here? Clothes fall very securely into the discretionary spending category, along with lots of other things. The exact amount to allocate to clothes, however, is a source of debate.

Who What Wear reports that your clothing budget can be 5% of your take-home pay. That’s a number I find shocking. If you bring home $50,000 a year, 5% equates to $200 a month. Assuming you are living into a 50/30/20 budget, that’s more than 16% of your entire discretionary spending allocation. Add in your salon visits and auto-shipped beauty products and there’s not much left for your cell phone plan, Wi-Fi, and red wine.

And if your essential expenses are currently higher than 50% of your take-home pay, forget it. You definitely can’t afford to spend 5% on clothes.

My advice? Limit your clothing spend to 2% to 2.5% of your take-home pay. That equates to 6% to 8% of your total discretionary budget, which is far more manageable. You can add in whatever you earn in cash-back rewards and loyalty points, too.

How to limit clothing spend

Person budgeting on laptop

Budgeting for clothes is one thing, but actually changing your spending habits? That’s a different challenge. Here are five budget shopping strategies that have worked for me.

1. Renting

Try Le Tote, Haverdash, or Infinitely LOFT. (See my comparison of Le Tote vs. Haverdash here.) For a flat monthly fee, you get a set number of garments delivered to you. You wear those pieces until you’re done with them. Put in the return envelope, send them back, and you get another box. If you’re the type who shops because you like to have something new on hand, renting scratches that itch.

2. Thrifting

In-store thrift shopping might be tough right now given the Great Lockdown, but you can still buy cheap, used garments at Poshmark or Thredup. Thrifting online or in-person is a fabulous strategy if you love shopping for the thrill of the hunt.

3. Designate one day of the week for clothing shopping

If you’ve being stuck at home has you shopping online to pass the time, try designating only one day of the week for clothing shopping. Say it’s Saturday. The other six days you’re not allowed to shop. You can make a list of garments you want, but you can’t buy anything. This is essentially the same thing as a spending freeze. It forces you to wait on purchases so you can make buying decisions with a clear head.  

4. Sell something before you buy something.

Having an addiction to clothes usually creates other problems — namely, an overflowing, unorganized closet. Address your messy closet and your clothing spend together by committing to getting rid of one garment before you buy another. You can sell the old garment or donate it, but you have to choose the piece you’ll kiss goodbye before you buy something new.

How does this help you spend less? Dig through your closet looking for something expendable and two things will probably happen. One, you’ll find garments in your closet you forgot you had. And two, the urge to buy something new will fade.

5. Tell friends and family what you want as gifts

There’s no shame in asking for what you want. If you want gift cards for Ann Taylor, ask for them! Really dying to have a sweater from J. Crew? Write down the specs and let your Significant Other know what’s on your mind.

Budgeting is not the worst thing ever

Budgeting for clothes — when you really, really love clothes — is not an easy task. Even harder is following that budget. But learn to love the thrill of buying used, the fun of renting, and the joy of receiving clothing gifts you asked for and you’ll probably realize you’re pretty good at controlling your clothing spend. Now if only you could figure out how to get the neighborhood cats to stop fighting…

Filed Under: Budgeting Tagged With: 50/30/20 budget, budgeting, budgeting for clothes, clothing budget

Spending Out of Control? Here’s How to Kick Your Bad Spending Habits 5 Ways

April 13, 2020 by shesgotcash

Woman shopping online

Stores are closed. Sports are cancelled. Businesses are shuttered and people are losing jobs faster than you can spell unemployment. Even the fashion gods, it seems, are silent. These are strange times, for sure.

When the economy goes sideways, it’s always a stark reminder to get back to the basics financially — to budget, track spending, price shop, save in an emergency fund, and follow all the other financial best practices that we get lazy about when times are good. If there’s any silver lining to the current economic situation, it’s that now is an ideal time to kick bad spending habits for good. You may even be under a legal order to stay out of the mall, after all. You might as well ride that circumstance to a financially stronger you.

Ready to start budgeting for clothes and rein in that spending? Here are five ways to do it.

5 Ways to Kick Bad Spending Habits

1. Budget

I wish I could tell you that budgeting was optional. It’s not. Budgeting forces you to pay attention to how you’re spending, and that’s important.

Start by going through your banking transactions for the last two months. A closer look at how you’ve been spending often naturally reveals savings opportunities. You might, for example, find subscriptions you don’t use or realize you’ve become a 1-click junkie, thanks to Amazon Prime.

If your income is still intact through this economic crisis, see if you can adjust your spending levels to fit the 50/20/30 model. Under the 50/20/30 budget, you allocate 50% of your net pay before retirement contributions to your essential living expenses. Then, 20% goes to debt repayment and savings. The last 30% is your discretionary spending money — which includes your clothing budget, along with your streaming services, gym membership, and salon visits.

This budget model also gives you some flexibility to adapt to a loss in income. Follow the model and you could, in a pinch, get by temporarily on a 50% pay cut — by cutting out all expenditures but the very basics.

2. Clear your browser cache

Admit it, you’ve used your browser’s auto-fill feature to get through an online purchase faster, right? So, guess what happens if you dump all that prefilled data and intentionally slow down the online purchase process. You have more time to realize that you’re shopping compulsively or buying things you don’t need — especially if you’ve just put spending limits on yourself.

Clear your browser history and disable that auto-fill. You could also change your passwords to your favorite store accounts. And if you’re really serious, install Freedom or StayFocusd. These are applications that block you from accessing certain websites.

3. Get rid of store credit cards

I know this is old advice, but it bears repeating. Clip up those store credit cards asap! As long as you have that card available, that store will find ways to entice you into using it. Extra cash rewards, double loyalty points, exclusive sales, and the like at your favorite online stores can wear down even the toughest of fashionistas.

4. Unsubscribe from store emails

Retailers employ very savvy marketing folks to build emails that sell. I know this because I used to be one. Unsubscribe from those emails and remove the temptation to buy something on the promise of saving money.

5. Pick up a new hobby

spending habits 1

Right now, while the economy is on lockdown, you can tackle your online spending habits. But later, when stores and salons reopen, you’ll face a new set of temptations. Address the future now by taking up a new, inexpensive hobby — you might learn to draw, garden, cook, or even sew. Heck, you could even start brewing your own beer or playing chess online.

Hobbies that capture and keep your attention have a way of minimizing excess spending. That’s because some of us have inadvertently made shopping a hobby, and we need something new to replace it.

Incidentally, hobbies are also fabulous stress relievers, and you can’t ever have too many of those in your life.

Filed Under: Budgeting Tagged With: budgeting, Credit Card, Credit Card Spending, spending habits

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About Me

catherine brock

Hey! I'm Catherine, personal finance writer, budget fashion expert, and equestrian (an odd combo, I know!). I've been sharing wisdom online since the early-2000s and have been featured on USA Today and MSN Money. I've also appeared on Fox2 St. Louis, ABC7 Chicago, CBS2 Los Angeles, WGN Chicago, and WCPO Cincinnati.

Recent Posts

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  • How Do Clothes Fit into a 50/30/20 Budget?
  • Spending Out of Control? Here’s How to Kick Your Bad Spending Habits 5 Ways

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