How do you set your budget? - YouLookFab Forum

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How do you set your budget?

Gretchen

Veteran

It's been a while since we've talked budgets and I have questions!

I've tracking my wardrobe for 5 months now (yay!) and have a pretty clear idea of what I have and how much I've spent. I'm not tracking wears yet, so cpw isn't a metric for me.

Without setting a specific budget for the last 5 months, I seem to come to a rough spending # that varies by about 10%, regardless of the # of items purchased. One the one hand, yay for consistency. On the other hand, I"m not sure it's great that one month I buy 10 pieces and another I buy 5 but I spend almost the same amount. I'm not trying to specifically lower my spend, but I want to be more conscious of how I am spending, and for what value.

So... without asking for specific #'s - how do you set your budget? Do you have a target price per item (different for pants vs dresses for example?) Do you budget monthly/quarterlyannually? Do you have a rainyday fund for splurge items? Any tips or tricks?

Shopping

66 replies

Latest reply was from Laura1975

Suz

(website)

Veteran

Frankly, I need to improve on this.

I shop mainly by season vs. month and I set a rough ball park figure per season -- more for F/W because it is my dominant season.

But then, if I sense I'm going over my budget, I tend to take on extra work so I can buy more! This is the blessing and the curse of contract work, LOL.

Angie

(website)

Fashion Stylist

Greg puts me on a budget

Style Fan

Veteran

Great question! A few years ago I decided I needed to figure out how much I actually spent on clothing. I reviewed the previous year's purchases to determine this. The number was reasonable so I set that as my budget for clothing going forward. I keep track of how much I am spending each year and it comes out to about the same every year.
I tend to think about what I need ahead for the season and shop carefully but with some emotions.

I am retired so my clothing needs are not what they were when I was working. Ten years ago I spent a lot more on clothing and did zero planning. My wardrobe was not as functional as it is now. YLF has helped me a lot.

Anonymous

What a GREAT question.

I have an overall household budget. That means that my wardrobe budget is part of a greater whole that includes both discretionary and non-discretionary spending. I need to balance everything accordingly for each calendar year.

I first decide which budget items are non-negotiable (house payment, retirement savings, emergency savings, household bills). That allows me to calculate what monies are left over for fun (travel, wardrobe, entertainment, electronics). Not everyone breaks their budget down into these exact categories. Everyone will have different categories based on importance and priority.

Once I know what monies are available for fun, I start to play with the numbers until I am satisfied. My wardrobe budget is an ANNUAL budget. That means I can spend it however I want, including splurges. But a splurge early in the year can have repercussions later in the year.

Your first budget will not be perfect, but you start to get the hang of it over time. Each year, I re-assess categories. I increased my wardrobe spending and travel spending categories in 2018/2019. It feels right to me ... so some instinct and goal planning are included in the equation.

I also have a plan for deciding how much is too much for a given wardrobe category. That is where my CPW calculations became of value. I found that if I buy a bag, I use it every single day. The CPW is pennies. I discovered that I could easily afford to buy expensive bags because (1) they bring me incredible joy, and (2) they are worth it to me.

In contrast, I found that the cost of some pants or tops were too high for me to ever achieve a reasonable CPW. Using this information, I zeroed in on what I considered optimal cost for a given category.

I hope this helps.

nemosmom

Veteran

I am also working on this.

I have a max amount I feel comfortable spending per year and, until last year, I spent freely up to that limit.

Ideally, I would dedicate a small amount for fun/fantasy pieces and save most of it for replacing essentials. Denim usually eats a good portion of my budget, but I wear it daily. I’m hoping to figure out how to better divvy the pot with more regular closet edits and closet reviews.

Anonymous

Lol, Angie .

I am a bit like Suz , in that I can play around with my business earnings to cover what I want to buy . I have no real budget though , which is irresponsible , but , that’s me . It would never be high enough anyways I use what’s leftover after my obligations are taken care of . In terms of setting limits per item ? Nope - I have internal thresholds based on , well , what I determine the value to be - but I play around with those limits all the time . I think once I scale my business back and move into retirement , I’ll have to set an amount that makes sense for the year , and stick to it .

Runcarla

Veteran

Around 5% of take home earnings! My habit in the past was to do 2 big seasonal shops, with a little in between. I need way less clothing now (retired 9 months ago) and have only bought 2 items since October (and nothing so far this year.). I also have a smaller budget now.

I would have no trouble going over budget, since it is a hobby and brings me pleasure. I am very economical and enjoy keeping a budget almost as much as I like playing in my closet! I 'balance the books' every month!

Anonymous

Umm...triage...If there's no vet bills, medical bills, house repairs, or car repairs-or if extra money comes in- during the month I can shop! Not exactly the most effective strategy.
I have more of a per item limit I'm comfortable with, based on expected amount of use. After the tracking everything exercise (not just workwear as I had been), I realized how hard my gear works. So, I decided it was ok to spend more in that category.
This year I think I'll set an item limit, barring any big changes, which will force me to be more PPP.

Staysfit

Veteran

I do what Sterling does, and it turns out to be about 5-7% of my take home earnings, like Runcarla. I set the money aside into a separate bank account. If I spend it, then it’s fine and if not, I can save it for another time.

Mainelady

Veteran

My budget is not set, which doesn’t mean it is unlimited, it means that it varies, depending upon needs/ wants/ opportunity.
I have very limited local affordable shopping options. During the tourist season, we have a few very nice boutiques, but they have limited options and are on the pricier side. I couldn’t build a wardrobe from them.
Over the years I have spent a lot of money purchasing items that were “good enough”. I wanted to support local and choose from options in my size (even more limited as a petite). I don’t do that anymore. If an item is right, I will purchase locally. If there is something I need, I will shop online if a shopping opportunity is not in my near future.
The nearest decent mall is 3 hours away. My twin lives in NJ ( we shop there and in NY). I like to shop when I go on vacations. So when I know I am going to have an opportunity for real, go in the store and try things on shopping, I review my needs, then my wants. I take a look at our finances and make a decision about a shopping budget at that point. For high end wants, I am very willing to wait for the right opportunity and timing (or to give DH a suggestion when he asks......hahaha, I always have a couple of good ideas at the ready). I can be patient and that serves me better and now that I am not settling for “good enough” I am not shopping that often. I am saving quite a bit of money by being particular about filling my needs and wants.

Cardiff girl

Veteran

I have a joy fund where any Frivolous money that comes my way ie birthday,Xmas,part time casual jobs goes and I use this for any clothing purchases other than absolute essentials like knickers ,socks and the like which come out of the house hold budget.Like Runcarla I quite enjoy managing a budget for clothes.

Molly Mac

Veteran

I have a monthly allowance for clothing that I keep in a seperate account. Some months I spend all of it and some months, I don't buy anything and it accumulates. I might spend it all in one month on a single item (usually shoes) or I might purchase 5 things on sale. It depends on my wants/needs for the month. Setting aside a specific monthly amount means I don't overspend and can plan ahead if there are any big ticket items I need. Like others, my budget is about 5% of my income.

rachylou

Veteran

I’m really set for life in terms of keeping myself covered, so I put clothing in with entertainment and choose between movies and clothes... lol, clothes always win but then I have nowhere to wear them...

Anonymous

I have an account that generates a variable amount of money every year and I use that to pay for clothing, gifts, and some household.

I pace myself over the year. My spending pattern is like yours but it doesn't surprise or bother me at all that sometimes the same money buys fewer things.

Anonymous

I’m intrigued by the 5% benchmark . Off to do some calculations.....(it seems SO low )

Anonymous

I actually don’t (well, haven’t), which has been a problem that led to not really knowing what I spend.
I plan to set a concrete budget this year and abide by it. I am sure reading thoughts in this thread will serve up some helpful parameters.

Anonymous

-Rachy, I grouse about that. I have neat stuff and too few places to wear it!

taylor

Veteran

I’m really impressed with the amount of tracking done on clothing items . The budgeting , percent of total budget spent , number of times worn , categorically organized as far as thrifted, full retail , on sale etc ,and just the overall meticulous information forum members keep on their wardrobe items. This is a totally new concept to me .

Stagiaire Fash

Veteran

That has been a tricky question for me recently, as I'm generally in a "low spend" period, but have needed some things. The tricky part has been determining when I've bought enough. A sound budget would help there, but at the moment, it seems a little unrealistic to know exactly how much is right.

I'm curious about the % of income mark. Of course as you get wealthier/have a higher income, you want/get nicer things, but I don't see it changing that much for me if my income were ever to skyrocket.

Jenni NZ

Veteran

I don't have a budget for clothes. Never have had. I know my mother kept one, and from the age of 15 she let me keep what was then called the "Family Benefit", some government money every parent got. ( That stopped in 1991, just when we had our first child, typical!). It was $150 per year in 1976 and I had that budget per year for 3 years ages 15,16 and 17. I think it helped train me and I stuck to it apart from my very first clothing purchase from my first ever pay- what's changed in over 40 years, it was shoes! $30 out of a $45 take home weekly pay in 1976. They were cork platforms that got totally covered by flared jeans at PPL touching the floor and short 15 year old me felt a mile high and SO fashionable. Still remember them fondly.

Anonymous

I feel some jealously of those that can earn more money doing extra work to cover splurges. That just seems so wonderful to me. My wages are set. I would literally have to get a second job if I wanted to have extra money to cover wardrobe or travel splurges.

I remember reading that 5% of income is recommended by financial "experts." I can't remember if that 5% was before tax or after tax.

I used to say "fashion" was my hobby, but now I say "wardrobe building" is my hobby.

If I gave free range to my hobby, I would be deep in debt. Hence, the setting of limits for myself. I should also add that playing with numbers is a form of relaxation for me. Setting a budget and monthly accounting actually relax me. This is not the case for everyone.

Bijou

Veteran

I have never had a budget before, so setting one for the current year is new to me. I have set my budget at 8% of my after tax earnings, so obviously at the higher end of what is recommended AND I thought I was being oh so good!

Looks like I need to negotiate a pay rise!

Thanks for starting this thread, it is good to hear the approach that others take.

Runcarla

Veteran

Financial management and budgeting information that is generally available is a good start for 'ball park' figures. I believe the goal of the general stuff is conservative and aimed at keeping people solvent! Live within your means and sleep at night. How you divide up the pie can have so many variables. Single or double income household? How many people are you supporting? Home owner or renter? Debt tolerance? What is 'recreation' to you (dining out, sports, music, gardening, collecting art, etc)? I could probably double my fashion budget if I gave up gardening!

anne

Veteran

So there are two main approaches
1)integrated into an overall budget
2) just its own thing.

I do the second - I come up with an annual amount (which I'm not rigid about, $50 over is ok) and it is based on what I think I'll spend that year plus a little over for things I haven't anticipated.

My experience has shown that every few years I have a bigger expenditure and have to either
1) replace a lot of things
2) have a chance in circumstances - e.g., going back to work

In between years I have a lower budget in maintenance mode - just buying a few things that need more frequent replacement or refreshing.

For me, footwear is a major part of my budget, as I'll pay higher prices for comfortable and fitting shoes - so the amount of shoes I plan to buy affects the amount I'll put aside. (Last year I budgeted for a couple of shoe replacements but didn't end up needing them. Bonus!!)

I'm an underbuyer, and not someone who enjoys shopping so for me a budget is giving me permission to spend that much. For many others a budget is a restraint.

My budget is pretty small by YLF standards. I try to only buy what I'll wear out, and don't like to churn.

As to amount per item I guess I have ideas in my head about how much I'm willing to pay (again, more for footwear). They've gone up since I joined YLF!!

As for the % of pay issue, I had heard the 5% recommendation before and went down a rabbit hole of reading up on it! My initial reaction, unlike LisaP and Bijou, was that it was a lot (FI, I'm with you on your reaction) I did a rough calculation - I spent around 2.3% of my take home pay on a big (not maintenance) year. The 5% is supposed to cover the whole household though, but I'm sure the daughters and my DH wouldn't spend 5% of his earnings (even though I work part time, and he doesn't have full pay, so our household income isn't super high)

But then again, our needs aren't great - I don't have a high profile job and DH can work in a tee and jeans.

I did for a few heady weeks in 1997 spend nearly 1/6 of my take home pay on clothes - yes - the first weeks of a job. I cut it down once I had a working wardrobe.

One last thing - I get a voucher through my credit card every autumn for either a department store or a mall and I found that I can buy quite a bit of clothing through that.

Anonymous

Well, if one made, for example. $100k a year, and took home about $60k of that (after taxes), that's only $3000 a year for clothes. For one person. Maybe I'm off in my own world, but that's not a ton of money to cover a healthy wardrobe. Of course, it's a ton of money when there is none, or very little, and I don't mean to make light of this, but split that over a few big purchases, and then general wardrobe stuff like underwear, gear, coats, boots, makeup, hair, manicures etc and it could be eaten up pretty quickly . That's why I'm a little surprised at that % benchmark. There must be some pretty healthy incomes among our forum members! Yes, I know, income discussions are not socially acceptable, and make people uncomfortable, but....now I think I need to revisit what I spend and insert come controls into the process - eek.

Sterling - I do have two jobs, which isn't always fun , but it's one way for me to have a little financial independence from the family budget .

Laura

(website)

Veteran

My husband is on Team Greg.

Stagiaire Fash

Veteran

lisa p--if there is no money/no income, then the clothing budget would be a lot smaller than $3k, which would be a problem for you, but there are plenty of people here who make it work. If the clothing allowance is $12k/year or $4k per month, I can't imagine that I wouldn't want to reallocate a lot of that to other purposes. I have plenty of friends & acquaintances at that level, but can think of only 2 for whom fashion is important, and I don't know if even they spend that much on it. One of them bought and furnished a second home in the San Fran Valley a few years ago, has taken 2 recent trips to the Mediterranean, one with her husband, one with him and the son and DiL, and in the past month has been at her home in Denver and the other one, and vacationing in the Southwest and a place even you would probably respect as snowy and cold. The other lives in a big old manor in New England, with her husband and 3 grade school kids, who they are planning to put through college and help out with first homes. Besides their uses, I can think of plenty of other ways people might choose to spend money. So if fashion is your hobby or priority, fine, but I don't see any reason to cast aspersions on amounts others may choose to devote to it. I'm not sure what you mean by "independence from the family budget".

Anonymous

Lisa P -- I once talked about getting a second job. When the second job actually became a reality I had to really think about my time commitments. I concluded my time was more valuable to me. I backed out. It was embarrassing.

Although it is always an option for me if I need it, not this year.

As RunCarla pointed out, the 5% is a conservative marker. When I did my calculations a few years ago, I was within the 5% range. That was prior to losing weight. Rebuilding my wardrobe has been expensive and I had to literally throw the budget out the window in early Fall. It was worth it to me.

Minah Lynn

I love styling and fashion. However, I don't splurge money on it. I only buy clothes when necessary like if there's an occasion.

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