Today we welcome back veteran forum member and good friend Laura, who has been with YLF for years and written here before. Laura is going to write a series of posts about her experiences with the finances of personal style.

People seem to fall into three categories when it comes to wardrobe budgets: They follow a strict budget; they have a ballpark figure and try to work within it, unless something really fab appears that they can’t pass up; or “Budget? What’s a budget?” 

I used to fall into the last category. But my husband is a CPA and a CFP, and he loves budgeting almost as much as I love style. The best way to keep the marital peace in our house was working out a wardrobe budget. 

Surprisingly, I’ve found that staying within the budget is the easy part. What was tricky was deciding how to set a budget. Here are four steps I used to find my magic budgetary number:

1. Decide on a Range

Most financial sites recommend a clothing budget that ranges from three to ten percent of your net income (here’s one that includes a calculator). So If you have an annual net income of $60,000, you might figure on a clothing budget of $1,800 – $6,000. (Don’t get too excited — that’s clothing for the whole family for the entire year, not just for you!). 

2. Establish your Needs and Priorities

The three-to-ten percent range is a wide one, so the next step is to hone in on your exact number. Do you and your husband work outside the home and require both a work and a casual wardrobe? Do you have kids who outgrow shoes, boots and coats twice a year? We decided to take this step a bit further, and listed our priorities to ensure we were spending our extra money on things that mattered to our family, including clothing. What do you care most about? Vacations, dining out, movies, sporting events, piano lessons, home decor, travel, soccer for the kids, clothing, shoes, jewelry? If vacationing in Disney World has been on your family’s wish list for years, you’ll want to scale back on the wardrobe allowance and beef up the vacation allowance, and everyone will be happy as a result.

3. Pick the Number!

We settled on a budget of seven percent of our net income, which reflected the fact that we have two growing sons, but also that my husband had purchased two suits last year and thus did not anticipate major work wardrobe expenses, except for dress shirts and shoes. 

4. Test-drive the Budget

Does the number you picked actually work? Does it leave room for unexpected purchases? One month, my son managed to put holes in the knees of all of his track pants, and that resulted in a budgetary crisis that threw me for a loop! 

I’ve found that I’m happiest with some flexibility. Often, I’ll spend two months’ budget in one month, and don’t shop at all the next month. With a wardrobe that’s basically complete, I’m in the fortunate position of being able to add some higher-priced pieces when I decide they deserve a spot in my closet, and a flexible budget allows that.

The irony of it all? Budget in hand, I feel much freer about spending money on wardrobe items. I shop guilt-free as long as I’m staying within the bounds that my husband and I mutually agreed upon. No need to discuss purchases in advance, no hiding UPS boxes or shopping bags. Plus, setting spending limits gives structure to your style goals — and will help you prioritize your wardrobe purchases

Do you have a clothing budget? How did you find your magic budget number?