Walk into any department store and the first sight that comes into view – racks and racks of clothes tempting you to splurge. 

But over the years, the racks and online options have been tempting consumers less and less. We have been spending less on clothes each year for decades. Clothing previously represented about 6.9 percent of household spending. Now, it’s less than half that. We now spend more on technology than on clothes. 

A big reason why we don’t spend as much on clothing is the trend toward more casual dress at work. Fewer of us need to wear a suit to work, so no two sets of clothing and your dry-cleaning bill is smaller. 

An $1,800 per year item on your budget

Overall, clothing falls down the list of big expenses, unless you follow the latest trendy clothes as they arrive in stores and pay top price. The average household spends about $1,800 a year on clothing or $150 per month. How you budget for the expense depends on how you buy clothes. 

If you have school-age children, most of the money you spend on clothes tends to happen before school starts, usually in August, or around Christmas. People also like to shop seasonally.  

Having a budget for clothing is a good start. If you tend to spend money monthly on clothing, or sporadically, then track your spending to see whether or not you need to make changes to how you spend in order to create a budget. Also, do an inventory of what you already have in clothing, particularly with children. Perhaps they have grown out of clothes and can be donated. 

Setting a budget creates a prescribed amount to spend. Establishing a separate account with your bank or another bank is a good way to ensure these funds don’t get mixed in with other funds and aren’t there when you need them. 

Clothing budgets: needs vs. wants

In creating the clothing budget, it’s a matter of figure out needs versus wants. We all need shoes, for example. But do they need to cost $250? The answer depends on your overall budget. You may be able to afford those shoes if you have the income and that spending doesn’t take away from the electric bill. 

Now, if you’re the frugal sort and are looking to save money on clothes, there’s a lot you can do to save money. Try shopping at discount stores where you get name brands for a lot less than when the clothing hit the shelves in stores the previous year. Look for sales. Then there’s consignment and thrift store shopping and save even more money on clothes. 

Many people have “budget” phobia. They don’t like the word and avoid the exercise. Keith Newcomb, Keith Newcomb, founder of Full Life Financial in Nashville, Tennessee, said the way around “budget” is simply taking a hard look at expenses, tallying them up and seeing where they stand versus income. 

If the checking account is growing, you’re fine, he said. But if it’s not then you need to look at where you can cut back on spending. Newcomb puts his clients through the exercise of doing a line-item markup of spending into “have to”, “just wanted to”, and “wish I hadn’t”.

While clothing is a necessity, or “have to”, sometimes the expense falls into the category of “just wanted to,” which is fine as long as the checking account is growing. But it’s also likely that your clothing falls in into the category of “wish I hadn’t”. And that’s a different story.

“The feeling of having a bunch of items you wish you hadn’t spent money on is like having a hangover,” Newcomb said.