Making Cents with Liam Croke: Cut clothes spend to suit your financial measure

Liam Croke


Liam Croke


Making Cents with Liam Croke: Cut clothes spend to suit your financial measure

Designer Michael Kors' meat and potatoes rule: '70% of your wardrobe should be clothes you would wear most days'

It can be difficult to know, how much you should budget for different expenses each month. One of the areas I’m asked most about is the amount spent on clothes.

People like to know how they compare against others and the amount they spend on clothes is right up there on the curiosity charts.

When they sit down and record what they typically spend every month, they’re always surprised by the results i.e. it’s always much more than what they thought it was. And for some, their outlay on clothes is an area which is actually stopping them from making progress in others like saving more, paying down debt etc.

So, what is the appropriate amount to spend on clothes each month?

You do need to set limits, but this is a tricky one nonetheless, because everyone’s situation will be different. A single person earning €90,000 could probably spend a lot more, and buy more expensive items, than a family of five could with an income of €40,000.

The 5% Rule

If you’re looking for a rule of thumb, the number that I think is a good one is, not to spend more than 5% of your net monthly income on clothes.

Whatever your monthly income is, multiply it by 0.05 and that’s the maximum amount you should be spending on clothes each month.

If, for example, your net monthly income was €3,000, and if you followed this rule, you shouldn’t spend more than €150 each month or €1,800 over a year. And that’s a per household spend by the way. If it’s just you, that’s fine, but if there’s a family of four, that 5% of your net income is for everyone.

But what is the average spend on clothing for most people in Ireland?

According to research carried out by TX Maxx, surveying 1,000 people, the average Irish adult purchases 23 items of clothing every year, priced at an average of €45.56, meaning we spend about €1,047.88 per annum. Parents spend about €312.99 on clothing for each child throughout the year.

The 5% rule includes the amount you spend on work clothes, but this cost can increase initially, especially if you are just starting out and have to build a work wardrobe from scratch.

If this is the case, you can stretch your budget to 7% of your net income, until you have what you need. But work clothes can be expensive, depending on the position you hold and you want to match what others around you are wearing as well, which is fine but keeping up with that can come at a cost, something you have to watch out for.

The Meat & Potato Rule

There is another rule of thumb I read about recently, and it comes from designer Michael Kors and it’s called the Meat & Potato Rule.

Kors suggests that 70% of your wardrobe should be clothes you would wear most days (meat & potatoes) like pants, skirts, solid-colour tops, jeans etc. and any additional clothes and accessories are what he calls the dessert, which are extras to help jazz everything else up.

It might be useful when you set out to buy clothes by allocating your budget and splitting it in that 70/30 ratio. It might help cut down on impulse purchases by buying something expensive that you might wear once.

Which leads me nicely to another strategy which might help save money.

The Cost per Wear Rule

The premise is simple: if you are considering buying something, you should give it a value of €1 for every time you use it. So, if you are considering buying a new shirt for, say, €50 whether it’s on sale or not, you’ve got to ask yourself, would I wear it 50 times?

If you bought something for €150 and you wore it three times, you’ve got to ask yourself was it worth it? Probably not, it cost you €50 per wear. But that’s an after-the-fact number, the key is trying to predict how many times you’d wear it before you buy it.

A study carried out in the UK might help in this regard, because it found items of clothing are worn an average of seven times. So maybe that’s a number you should divide into the ticket price of an item, and that will be your cost-per-wear number.

The 5% rule is a good one, but don’t let it define your budget. It doesn’t give you free rein to spend that percentage of your income either. It’s a useful guideline that’s all. If you are a minimalist, you might be appalled at that percentage or if you’re a spendthrift, you’re shocked it’s so low.

Clothes spend can impact other areas of your finances and if you’re carrying debt, have no emergency fund in place, are saving for a deposit for a house etc. then, excuse the pun, you’ll have to cut your cloth according to your measure.