I have never really been the type who was into fashion. Call me crazy, but until about a year ago I just didn’t see why clothes and fashion were such a huge thing for women. I was always the type of person that would rather spend money on things like classes, books and growing my business so anytime I allowed myself to spend money on clothes, I felt guilty about it which ultimately kept me in this cycle of not truly enjoying fashion for myself.
But, about a year ago, a lot of things shifted in my life and I decided I wanted to finally find a way to spend money on clothes without feeling guilty about it. With the help of my amazing friend and stylist Catherine Cassidy of U*Styled, I learned how to be Financially Wise with my closet. We went through my current clothes and found new ways to wear them and then I learned to buy quality pieces and add in trends like pieces from SHOP THE TRENDS to spice things up during the seasons.
I also redesigned my monthly budget to allow for a certain amount to be spent on clothes every month. This has allowed me to feel good when buying clothes and feel good wearing them.
Now I truly enjoy learning about fashion and spending money on clothes every month.
I know a lot of women love fashion and clothes, so I want to know, have you ever suffered from guilt when buying clothes and shoes?
If so, watch this video where I share with you how to set up your monthly budget to allow for spending on clothes and not feeling guilty about it.
Also, check out Shop The Trends for fashionable pieces you can buy on a budget.
Step 1- Calculate your net income every month
This is the amount of money you bring home every month after taxes are taken out. You should know this number very well as it sets the stage for the rest of your budgeting allocation.
Step 2- Follow the 50/20/30 rule for spending and saving
Following this rule, 50% of your net income should go toward fixed bills and expenses such as your mortgage or rent, utilities, insurance payments, and basic food and living expenses. Then 20% should be used for your financial goals, this is known as the pay yourself first strategy as you will be saving before you spend on variable and fun expenses. This should include saving into your cash cushion, making additional debt payments and saving for retirement to name a few. Then finally, 30% of your net income can be used for variable or fun expenses. So this is where you get to spend on things like entertainment, hobbies, dining out, travel, yoga classes, clothes, etc. I can this fun money because really you should be spending it on things that add to your life and that you really value in life.
Step 3- Decide how much of the 30 you can allocate toward clothes
Once you do your budget breakdown and determine how much you can allocate for this variable/fun category, decide how much of that 30% you actually want to use toward clothes. For example, let’s say you do your breakdown and you have $2,000 left over every month to spend in this category. Out of that $2,000 you may want to have money for your yoga classes, hobbies, and clothes. Let’s say when you make your list of items that would go in this category you want to be able to spend $200 on clothes every month. Then since you’re saving first, this is totally allowed! Or maybe you are really into fashion and want to spend more, say $300 or $400 per month. Totally cool as long as you know you only have $1600 left for other items in this category. If you want to splurge on clothes, just know you will have to cut back on other areas to make it all work. The choice is yours and one only you can make. You can also decide to bank your clothes money. For example, if you allocate $100 a month toward clothes, maybe you wait every 3 months to actually go shopping so when you do, you have $300 to spend on clothes.
Step 4- Create a clothes wish list
I love this idea and it has helped me really get clear about immediate versus delayed gratification. So often, we do impulse buying and “want, want, want” so many things in life. I mean, how can we not when we are constantly bombarded with messages to buy now. But long term financial success means being able to clearly identity wants vs. needs. This is critical with clothes and shopping. Keep a list of items you want or need in your wardrobe and then when it comes time to go shopping that month, review it and see which ones you actually still desire. I always fun that most of the items I list I end up not getting because after a few weeks, I just don’t want it anymore.
Step 5- Shop for deals
There are so many sites these days that offer great fashionable pieces on a discount. Shop the trends is one of them. When shopping deals, just keep in mind, that just because it is a designer item that is 60% off, it still doesn’t mean you need it. Always review your wish list and make sure you only actually buying what you really want.
Step 6- Use the 48 hour waiting game.
Again, delaying gratification with our spending allows us to see clearly if it is a want or need. If you really want something and you know it is not on your list, wait 48 hours to buy it. If you still want it after that time then go buy it and enjoy it!
Step 7- Host a closet party and trade clothes with friends
This is fun as we all often look at our closets and say “I have nothing to wear!” when in reality we have lots of options. Host a party with your girlfriends and exchange pieces you no longer wear. This is an easy way to update your wardrobe and have fun with a few close friends.
Become a Financially Wise Woman in 6-weeks! Check out my new online Money Class. You will LOVE it!