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Help with clothing budget

Maya

Veteran

This is more of a basic life skills question than a style question, but I'm wondering how to plan my clothing budget. Before I didn't really have one because I made so little that it really was just play money. Most of it went to food, commuting, misc. school supplies, etc. Whatever was left over, I pretty much spent on dinner with friends, movies, and of course clothes that were almost always on sale.

Now things are kind of different. Unfortunately the place I work at has decided they don't have the budget to hire me full time, so I'm working only part time now. It's still a lot more than I did before...but it's still not even close to enough for me to be independent in one of the most expensive cities in the country.

My expenses are pretty minimal since I live with my parents and don't pay rent. I guess I am wondering how you decide how much money to save for a rainy day, vs. spending money for clothes each month. If I asked my parents, they would inevitably give me the "just save everything" answer, which is depressing and not very helpful: that's why I'm coming here, to people who actually have monthly shopping budgets regardless of income. I don't want to spend beyond my means, and I feel like since I make so little money, any amount that I spend for fun is going to be living beyond my means, which is why my parents are telling me to just save everything. I would like to build up some security for at least 6 months in case I lose this job for whatever reason, and since my expenses are so few right now, that shouldn't be a lot. At the same time, I wonder if I should be saving so I actually can afford to move out, even with a low paying job...or if that doesn't make sense because my savings would eventually run out and I'd have to move back home anyway. Does that make any sense at all? I also want to start saving for a new computer, since I am a graphic designer and that would be really helpful for me if I want to make some extra income by freelancing.

I'm looking for a new job that will allow me to move out, but let's face it: in this economy, it's not likely that I'm going to find anything anytime soon. I am just not sure what it means to live beyond my means right now. Sorry if this is sort of off topic. I'm just trying to be responsible with my shopping and most people here are older and wiser than I am and can understand what is going through my head right now.

General

31 replies

Latest reply was from Patience

Ana

(website)

Veteran

This is a good question, Maya. I'm glad you're thinking about these sorts of things now.

I know our situations are a little bit different, but this is sort of what I would suggest just based on my own personal experience. Also, I'm not a financial expert by any means, so take everything I say with a grain of salt (hopefully others will chime in who know more than I do). If I were you, I would figure out how much my expenses right now are. This is how much you pay every month to live with your parents. You might not pay rent, but maybe you buy your own food, or help with utilities, or pay for gas or whatever. How much are your expenses? Then start by saving up 6 months of those in an "emergency fund," with a great majority of your extra money (I see that is already part of your plan, and this is great). Once you've saved six months' worth of expenses, then you can lower the percentage that you put away to an emergency fund, but still try to put a set amount into it each paycheck. However much you feel comfortable doing. It could be 10% of your paycheck, or 15% or 5%, but do put away something for yourself to save every month. You might not need it now, but someday, you'll be glad you have it (speaking from experience).

After you have saved your 6 months emergency fund, figure out which computer you want and how much it will be, and play with some numbers. That's usually how I figure out a budget. How soon do you want the computer? That will determine how much you will want to save. If you really, really want it soon, you might be motivated to save all your extra money and eschew clothing and other things for a while. Maybe you think you couldn't live with not eating out for 6 months or however long it takes to save up. Well, then a new computer might take a little bit longer to save up for. Does that make sense?

As far as allotting money to move out--that's a tough situation. I've never lived anywhere as expensive as NYC. I could always manage to pay rent and stuff on my salary (but just barely, so I totally get where you're coming from there). How would you feel about possibly getting a roommate until you got a job where you could support living by yourself? Also, if you really wanted to get the full experience, maybe you could to a "trial run" renting system with a "rent" that you pay to your parents? You could make an arrangement with them that you will pay them $300 a month or some X amount, and they can then put that into an account for you to help you move out someday?

As far as shopping and fun money goes--I do think you need something. Obviously, we've all been in situations where we just couldn't afford to buy anything for a while (job loss, other bigger one-time expenses, etc). But to live that way until who knows when is depressing. You need some freedom in your budget, even if it's $20 or something. That's your "fun" money. You can spend it on whatever you want, and you don't have to feel guilty or answer to anybody. If you want to buy $20 worth of candy bars or lattes or spend it on a shirt, or paint supplies or whatever, that's okay. It doesn't actually matter what you spend it on. It's just a feeling like you have control over this money, and you get to decide what it's spent on. That's a good feeling, and I think everyone kind of needs that. I know I do. Brendan and I tried not splitting up our personal spending money and it was a disaster, because we were always questioning each other on, "Why did you buy that?" Then we decided to split up our money, and we each get what we call our "allowance." We get a set equal amount apiece, every paycheck. And we can each buy whatever we want and not have to answer for it. It's been a really good system for us. And when I graduate and get a "real" job, we'll have to re-evaluate our system and make some changes. That's the thing (and the unfun bit), you kind of have to keep on top of it, check in on your budget, and make sure things are still running the way you had planned for.

JewelryGirl

Listen to Ana, lot's of good advice there! Find some fun resale/consignment/thrift shops by you & go with a list of pieces you need/want. Go often & just browse through quick. And, look for some fun statement pieces. You might be surprised at what you find! A new piece or 2 can really spark up your wardrobe! Sales are AWESOME right now though! I also think you can go along way with the basics & the right accessories! Oh my favorites are the accessories!! Take pics or notes on combinations you like. Otherwise, (if you're like me) you might tend to forget & not be as creative. Have fun & just keep your long-term goals in mind so you can be happy with yourself along the way!! Enjoy the journey!

Maya

Veteran

Thanks for all the advice Ana. I can't move out right now even with a roommate. I wouldn't even think about living by myself--it's impossible at my income, unless I live in a housing project or something like that. If I were working full time, I could probably at least manage to live in the suburbs with a roommate, but they're forcing me to stay under 30 hours/week. My rent with a roommate would be at least $600/month for a small hole-in-the-wall in Brooklyn, and that would be quite a steal.

My parents have mentioned paying them "rent"--and having them save it for me for when I'm ready to move out. I just don't see that as a solution because it's eventually going to run out. I mean, it will definitely be good to have it saved, but not for rent.

The computer isn't really critical, so I can take my time saving for it.

I guess after the YLF convention, I'm on a shopping ban for a couple of months =\ You know, it's times like this when I'm REALLY grateful for the YLF clothes swap program!

I just feel really crummy that I'm 25 and can't afford to live on my own! It's so pathetic. I could just move somewhere else, but I really love NYC and I have to stay in the vicinity of a large city in my field anyway.

shiny

Veteran

Without reading everyone else's responses, in general, I follow what's known as the "Balanced Formula" - which is workable for any salary level:

50% goes to "Must Have's"
30% goes to "Wants"
20% goes to Savings

Must-haves would include rent, groceries, utilities, transportation, insurance, and education loans. Whatever your salary is, half of it is what one can afford to live on.

Savings includes long-term savings like retirement, and short-term savings like emergency fund.

Wants is the slush fund for entertainment, eating out, hobbies, travel, and yes... my clothing budget.

Obviously you must have SOME clothes, so you can justify a certain amount of this in the "Must-have" category. What I do is put my kids' clothes in the Must-have category and my own clothes in the wants.

Since you don't have rent right now, I imagine your must-have category is going to be a lot smaller than 50%. I imagine your commuting expenses fall into this category, and I would also put into it a certain % for work clothes - because, when you think about it, they are an investment in your future earning potential!

I have my savings deducted automatically from my paycheck, so I don't even see it hit the bank. Last year I saved closer to 25%, but in previous years when kids had higher "must-haves" I was closer to 15%, so it all evens out in the wash. This year - for the next 6 months - I'm planning on padding my emergency fund a bit more, so will probably save more than 25%.

At your age, 20% scooped up automatically and put into a retirement fund is an incredibly wise idea, especially right now with the market as low as it is.

Since your must-haves may be lower, it could also make sense to save even more than 20%. But that's up to you.

Honestly? If I was in your shoes, I would take whatever you make, have 20% automatically siphoned off into a retirement account, then take 30% and put it into checking to spend as you want. If you blow the whole thing on clothing, so be it. This 30% is the fun money - just as Ana says. It's what makes life worth living. People tend to get miserable when they don't have any fun money. So don't feel guilty about spending it.

With the remaining 50% - some of that is going to go to commuting, and other necessities. The rest? It's your choice. You could save it all for a goal like moving out someday. Or save it for higher education, or a new computer. Or whatever. It wouldn't hurt to get in the practice of holding back 50% of your income for the Must-Have's - even if you hand it over to your parents and they save it for you for a later date.

However, far as I'm concerned, you could certainly make a case to spend a proportion of it - or even ALL of it ! - on work clothing, since, as I said above, looking nice on the job is an investment in your future. You are in those transition years, afterall. It would not hurt you to invest in clothing that allows you to dress for the career you want someday. It may, in fact, help you reach that goal faster.

Ana

(website)

Veteran

Wow Shiny! This is great advice. I'll have to break my budget down into percentages and see where I stack up!

Laura

(website)

Veteran

Good advice, Shiny and Ana.

Maya, your question about trying to live on your own made me think. I lived in NYC when I was 25 and starving, and remember how tough it was. I had roommates and everything other weird living situation you can imagine just trying to survive. There were some rough moments and if I had parents in the area you can bet I would've been on their doorstep. But the fact that I was somehow able to make it on my own gave me a huge confidence boost that paid off in lots of ways in the future. In fact, a couple of times when rent went up, it forced me to march into my boss' office and ask for a raise, something I never would've had the guts to do otherwise. The need to live independently made me a lot more assertive and directed because it was a matter of that or being sent home with my tail between my legs

I hugely agree with Shiny's advice about dressing for the career you want someday. That is very true and works like magic.

julijuli

Maya - I think it's great that you are getting advice and trying to do the right thing in terms of a clothing budget. I remember when I was 25 I was no where near that responsible! Your parents should be very proud and I know it's tough to be living with your family but take comfort in the fact that it's temporary and eventually you will be on your own.

Anonymous

Maya, you've got lots of good advice. I remember that I had to spend quite a bit of my first paychecks after college for clothing for my job because almost nothing from my college days would work. Then it got easier. Shiny gives excellent guidance in having money from your paycheck go directly into savings. When you don't see it, you don't spend it.

marianne

Great advice from Shiny. I think that was my approximately my breakdown when I started working and living on my own. I would buy maybe one nice thing a month (nice meaning not designer but BR :)) but I didn't need anything fancy for work. I just wanted to add that it must be very hard to keep in line living in NYC with so many money spending opportunities around.

Nicole

Veteran

Maya,

I've helped many people set up working budgets. If you would like to email me privately I can help you too. Unfortunately the only way to do it is to know how much money a person actually makes.

Here are the basics that I start with. You have to prioritize your expenses. If you paid rent or had a mortgage that would be #1.

If you had debt (like a car loan or CC or student loan) that would be next (because you want to keep your credit score high).

Next would be living expenses like cell phone, utilities, gas or bus fares, and of course food. But since you live at home, your food expense is more like an entertainment expense....so I wouldn't consider food as a living expense.

Now subtract all your essential expenses from your monthly take home pay. And the difference is what you have to work with.

From there you decide how much goes into savings (long term like retirement and short term--like a trip or new laptop), how much goes into entertainment, and how much goes into your clothing budget.

It's important to be flexible--so that if you find out it's not working then you have to be able to shift money around. But knowing what is important to you helps you decide where you want to spend your money. Like I said, if you'd like me to put together a working budget for you, I'd be happy to do it.

shiny

Veteran

I agree with Nicole's strategy with one exception: I'd put 20% savings as the number 1 priority. I might be more flexible for someone in a different circumstances, but at age 25, with no rent or mortgage, I think 20% savings should be the number 1 priority.

This isn't savings for a house or downpayment or computer - it's for retirement. It's really easy to not think about retirement when you're in your 20s, but this is the ideal time to start saving for it. Especially with the stock market so low - your dollar will buy stocks at low prices.

If you start retirement savings now, then later, if you have kids or you get laid off or something else comes along like the need to save for a downpayment, you can rest easier if it becomes necessary to temporarily suspend retirement savings. You'll have had a big head start. Because every dollar you put away now, provides a lot more impact than a dollar you put away later - in your 40s, 50s, 60s.

So pay your future first.

Tanya

Veteran

This is very interesting to read, although it does make me feel depressed. Based on Shiny's description, my 'must haves' are 75% of my salary

Nicole

Veteran

I agree with Shiny that saving for retirement is priority. She is 100% right that the younger you start the better off you will be. It seems like just yesterday when I was fresh out of college and a coworker telling me to contribute to my 401K at least up to the company match. But if you are working P/T, you may not have a 401K option. You could do an IRA, which I beleive allows you contribute up to $5,000 per year. That is about $416/month. Of course you don't have to contribute the full $5K. You could do any amount you want, and you could do it as a lump sum deposit too. (like if you get a tax return, you cand drop it all in an IRA).

However, I do think having a roof over one's head and being able to get back and forth to work is priority number 1. I know you don't pay your parents rent, but I would take them up on their offer to collect rent and save it for you. Even if your parents give you the money back when you do move out--you'll have some extra money.

My husband and I have joint finances, but we do a weekly cash allowance like Ana and Brendan. I also give my kids a cash allowance and they are expected to use their money for their own needs. My daughter gets $24 every 2 weeks and my son gets $18 every 2 weeks. (Amounts are based on their age).

Our retirement savings are done automatically, as are short term saving goals. Like Shiny, we just have different amounts taken out of our checks and direct deposited into various accounts. Every pay period I put half of my mortgage payment into a separate account. Other than living expenses, like food, gas, electric, phone...we don't have any other debt. But if I had a car payment, I'd put half of that into the separate account with my mortgage payment.

So actually when I work on my budget, I use what's left over after savings, mortgage and fixed bills. I think it is great that you are looking into this Maya. This is a great website that I check daily:

http://moneycentral.msn.com/home.asp

Nicole

Veteran

Tanya, I guess it all depends on what you consider a "must have", right?

The reality of it, we probably all have things on our "must have" list that are really not "must haves." I can think of three off the top of my head:

Music Lessons for my daughter
Telephone/Internet Service
Cable TV (I'd actually have no problem losing cable, but sports are a big part of my family's life, so they would freak out a little bit).

Tanya

Veteran

Well, on my must-have list are rent, utilities, cell phone, transportation, groceries and medications - I can not imagine being able to live properly without any of them. The high percentage in my case is mainly due to two things: very small grad student salary and pretty big rent in this area .

I am not complaining of asking for advice, it is fairly similar for almost any grad student I know and should change once one gets a real job. I am just saying that it is depressing to be in that situation at age of 31.

bella

(website)

Veteran

Tanya- I completely understand and commiserate. One way to look at it is that our current sacrifices will pay off in the future.

Maya

Veteran

Oh man, I sort of wish I hadn't asked. All of this is money talk is stressing me out now

My job is just that--a job. I get no benefits or 401K or anything like that.

Right now I'm not even repaying my loans. That is going to be a huge money suck. I definitely sympathize with you Tanya. My "must have" category is going to be pretty significant once my loan repayment starts. But I think in your case, your efforts will pay off because you have chosen a good field and you attended a very good school. I am starting to think I chose the wrong profession. It was an awful lot of money to spend on education in exchange for a lifetime of being in the poor house.

Nicole, I might shoot you an email, but I'm just terrified of the results. I'm actually ashamed of the amount of loan debt I have, compared to the amount I'm actually earning. It really bothers me now because even though I haven't even been out of school for a month, it feels like it wasn't worth it at all. There just aren't that many jobs out there, let alone jobs for someone with as little experience as me. I know the economy is bad, but that is little consolation.

Laura, if I were working full time, I could probably pull off a not-so-glamorous place in NJ, if not right in NY...but I don't earn that much to begin with, and on top of that I only work 30 hours or less a week, so it is just impossible. I understand what you're saying though.

I think the YLF convention is really going to be my last opportunity for shopping for a long time. Hopefully more people will start posting swap items =\

Nicole

Veteran

Maya,

Part of the terrifying feeling is probably coming from not having a budget. Every budget, no matter tight, gives a person a feeling of security and a future goal to work towards.

You are young....I'm sure if I pulled out my bills from the year after I graduated from college, you'd feel better about your situation. Also, being single changes the financial reality for both you and Tanya. When I graduated from college, Jason still had several years left of school. I worked full time and supported us while he finished school and worked part time. But even before we were married, we had a budget and goals and worked pretty hard to attain those goals. You are at the perfect age to start working on this. Now that the school chapter of your life is closed, it's time to open the next chapter.

I know that this economy sucks, but it sounds to me like you should be putting your efforts into finding full time work. A big mistake a lot of people make when they feel poor or broke, is looking for ways to cut back, but fail to look for ways to increase their income. Maybe a second part time job--even if it's retail--maybe a store you love that offers employee discounts. The more hours you're working, the less hours you have to spend shopping or feeling sorry for your broke self.

I hope you do shoot me an email, I would love nothing more but to help you work out a budget that you feel good about. Actually, the fact that your income is low and your loan debt is high, makes you in that much more need of a good solid budget. It really is an empowering feeling knowing where every penny is going. As you pay things off, you can shift your money to other areas, including fun area. And remember budgeting is not ALL or NOTHING. That is something very important I learned from Suze Orman (I highly suggest you get her books or watch her show). You can put small amounts into several different goals, you don't have to put it all into one major goal at a time.

Anonymous

I second the idea of a second job. Many of us did that just out of school when our jobs didn't pay very well and had loans to pay back. I taught school and worked evenings and weekends at a shop. Because I didn't graduate with a Masters degree, I had to continue to work toward that by taking summer classes but made some extra by selling encyclopedias door-to-door. My dad who was also a teacher, worked evenings and weekends as a meat cutter for a butcher. It also allowed him to bring home meat that didn't sell. My husband moonlighted as a bartender and tutored. At times between the two of us we were holding down 6 jobs until he got his PhD. Actually those were good times in spite of the way it sounds.

shiny

Veteran

Maya - no 401K, then put the savings into an IRA.

I graduated with an English major. My dream was to work at a magazine in NYC. I got offered $14K to start - this was in the late 80s.

I had friends who were airline stewardesses and offered to share rent with me on a one-bedroom apartment. The idea was that I'd get the bedroom and one or two of the other 5 stewardesses would get the couch - when they were in town. Yep, 6 women in a one-bedroom apartment! But with their flying schedules, it wasn't like we'd have all 6 of us in the apartment at the same time.

So I sat down and made myself a budget, and I could've done it... but ultimately, I decided I wanted to live on my own, more than I wanted to live in NYC. I had lived with roommates all throughout college, and I wanted a chance to live completely on my own for a few years.

Out went the NYC idea...

Ultimately (after months and months of looking) I took a tech writer position making $17K. It was enough to swing my own $600 rent in a truly horrid hovel of an apartment (which I *loved* because it was all mine, mine, mine!!!), and a modest car payment. This was outside of Philly so I was still close enough to drive to NYC and crash with my friends on the weekends.... those were the days!

Then I got laid off from that position, but rehired in as a marketing copywriter. I have been in marketing ever since, with no regrets that I never worked for a magazine.

In the end, life is all about choices. But it's also about being open to following where life leads you. Back then, I would never have considered a career in marketing. I took that job because it was better than being unemployed, without knowing a thing about the field. Turns out the field suits me!

While the economy is really bad right now, I read an article awhile back saying that graphic designers and similar are going to be in hot demand. There is a lot of demand for aesthetics - it's not just function anymore, it's form too, or rather, a perfect melding of the two. Example: the ipod and the iphone.

Nicole

Veteran

Oh Shiny brings up another great point! My major was Paralegal Studies, but my first job out of college was as a point and click photographer for an Olan Mills studio. Then I worked as a relay operator for the phone company. (Which is the kind of operator who makes phone calls for deaf people). It wasn't until I went back to work after my kids were born that I actually started working in a law office. So, keep your mind and your options opens. Don't feel like you HAVE to work in graphic design. If you find a job that sounds interesting, then it may be worth taking.

Laura

(website)

Veteran

Maya, what size do you wear? I have one swap item for you (Tahari grey pinstripe pants) but will bring more if I know they have a chance of fitting. Do you wear a petite or regular?

Laura

(website)

Veteran

p.s. I was like Shiny at that same time being faced with the same type of decision, only I was foolish enough to take the $15K intern salary at a PR firm and move to Manhattan. Three weeks into the job I had to ask (beg) the VP to hire me as an assistant account executive, otherwise I would've been headed home. Miraculously, they did ...

Tanya

Veteran

Maya, I am just curious if you got/read the email i sent you last night. Sometimes I have issues sending emails from the yahoo account...

Eva

Maya, I commend you for your initiative on starting a budget. You are looking at this very responsibly. The fact that you are concerned by the email responses just proves this. You will be financially fine in the long run. As you heard from Shiny, Nicole, Tayna and others about their challenges straight out of school (or still in school) it can take a while to get on your feet. This thread brings back memories of my poor days out of college.

A second part time job might be good option for you to make a bit more money (understanding the economy is tight). There are some companies that give benefits with 25 or 30 hours per week such as Starbucks. It is difficult to say what percent you should save, because it really depends on what your “must haves.” But try to save something because it develops good habits. Hang in there you have good support and advise on YLB.

Ariadne

Veteran

I too have the big huge student loan debt and probably the most highly impractical degree possible (MFA in Creative Writing, and I write POETRY of all things, which is the least lucrative genre in the universe). And I live in a super-expensive city (2nd most expensive in North America). Sigh. It's depressign to even think about finances right now. I can't wait until my husband is finished with his degree and we can move somewhere affordable.

Maya

Veteran

Thank you ladies for your words of encouragement. I had considered taking up another part time job, but I think I would be more open to it if I wanted to stay at my current job. Finding a graphic design job is very different than trying to find a "regular" job. It's not just a resume and a cover letter: the most time consuming and most important part is the portfolio, which constantly needs updating, embellishing, fixing, and tailoring for every different job I apply to. So every weekend I pretty much work on that. Each employer might require a different format, i.e. a PDF or a website, so I need to create a new one in a variety of different formats. It takes quite a long time. I do think I have to work in graphic design because honestly, I have no other talent or experience, and I do enjoy it. I don't think people in this economy are too keen on hiring someone like me right now. I know a lot of jobs that would normally go to entry level/inexperienced workers are going to people who are overqualified simply because they need work.

Nicole, I'm going to shoot you an email this weekend. Thank you so much for taking the time to help me out. I'm very touched at how supportive everyone is being.

Laura, I wear regular length and have it hemmed most of the time, though I can occasionally wear a petite inseam if it's 30" and won't shrink. I don't think I have anything for you though I'll go through and check.

Adrienne

Im 54 years old, a college grad who paid back loans, have worked as a teacher for over 25 years. My advice is this: Keep searching for a job in your field but not just in NY. There are many other cities out there where living on your own is more affordable. If NYC is it for you then get two other part time jobs. Living with a roommate is always cheaper. The question is who will the roomate be? Your parents are smart to keep you home it is a different world out there than when I was 21. Follow the advice of the other board posters in creating a budget. That way when you do have money coming in you will be diciplined on how to manage it. Ask your friends and relatives to donate clothes to you and sell them on ebay. Use that money for your wardrobe splurges. Many people do it. Think outside of the box get creative. Finding a job is a job. Realizing and planning your financial future is really a mature attitude. Dont get depressed my daughters are currently in much the same situation as you.

yublocka

(website)

Veteran

Hi Maya I don't know whether you do web stuff as part of your design, but my "baby" brother (now 25) has just finished doing graphic design at uni in Australia. Similar to you, his first job was only part-time (3 days a week) but he ended finding alot of freelance web stuff on the side to complement that. All the freelance jobs, and the stuff from his normal work added to his portfolio.

Maybe you could find a few "on the side" projects like that to supplement your regular work? Best thing is you can do it from home pretty much whenever you want - so versatile! Funnily enough one of his freelance jobs is now his new "main job" - he got enough work he could quit his other one. Just some food for thought.

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