Dress for Financial Success

Trends come and go. Fortunately, saving money is never out-of-style. Here are ideas that will help you dress for success while staying within a responsible budget.

Spend some quality time with your closet.You need to know what you have in order to know what you need. So spend some time going through your closet and getting rid of items that are either worn out or never worn. I try to employ the one-year rule: If I haven't worn it in the past year, it's time to part ways.

This phase of the process can be especially painful for you packrats, so be honest with yourself and your wardrobe. Start a pile of items you aren't going to keep and make a list of what you have and what you need. Don't skip making the list! We'll come back to this later.

Give someone the shirt off your back. A great way to part with your clothes is to offer them to friends and/or family. It lessens the pain of parting with that beloved pair of pants that doesn't fit anymore if you know a friend will put them to good use.

Often, these people will return the favor. We give our son's clothes to friends who later give us their daughter's clothes. My wife also received a number of business suits and blouses from a friend who wasn't in the corporate world anymore.

Budget your list and list your budget. I mentioned creating a list in the first step. If you do your grocery shopping via a list, this should come naturally. Sticking to the list cuts down on impulse buys and wasted purchases on things you may not need.

Then take time looking at your budget. Crown Financial Ministries recommends that the clothing budget for a family of four should be roughly 5% of your net spendable income (see their online budget calculator). Carve out your portion of that percentage and you'll know how much money you have to work with for the year. Now simply compare the amount you have to work with to the list of items you need. Also, I would advise setting aside a fifth of what you have available for a "clothing emergency." For example, if your portion is $600 for the year, set aside $125 for reserve and you have $475 remaining. Maybe you'll want to divide that roughly in half for two shopping trips a year. You now have an idea of how much you can spend on your items.

Shoppers, you may start your engines. It's time to hit the streets shopping. There are a number of venues to visit, so here's a brief rundown of what stores are best for what clothes.

Wholesale Clubs: While their variety is limited, how many options do we really need for socks, underwear, and t-shirts? Let me encourage you to start shopping for your basics at your local wholesale club.

Thrift/Consignment Shops: Nothing wrong with paying used prices on clothes that may have been only gently used. Author and money-saving guru Rhonda Barfield suggests calling first to see how often new merchandise is displayed and when old merchandise is reduced. She has found nearly perfect Reeboks for $1.00 simply by going on such a day. And better yet, she earned a credit for trading in clothes she couldn't use and then used that credit to get a dress she needed.

Outlet stores: Outlet stores have come a long way from the days of poorly lit backrooms filled with boxes of damaged or irregular clothes. Today, you can find excellent prices on good clothes, and do so in an environment that doesn't make you feel like you're doing something illegal.

Retail Stores/Web: I almost never buy anything from retail unless it's on sale. My view is if I wait long enough, it will be reduced. If it sells out, I don't need it. But if you do insist on paying full-price, consider stores with replacement guarantees. Some retailers will replace products that wear out before your child outgrows them, such as shoes. And speaking of shoes, as they go in and out of style, you can often times snatch up a good deal just because this season's colors change, though the model itself hasn't. Zappos.com, the Internet's largest shoe retailer, has an excellent selection of shoes on sale all the time, often with free shipping both ways.

Yard/Rummage Sales: I am not a big fan of these myself because I don't care to barter. But I know people who do and they save a bundle, especially on children's clothes and seldom used items like snowsuits, mittens and boots. Try going late in the day in hopes of finding a weary seller who discounts their stuff even deeper just to get rid of them all.

In summary, you can do an extreme wardrobe makeover at a reasonable cost. It all comes down to making a plan, sticking to it, being patient, and finding good values.

Published since 1990, Sound Mind Investing is America's best-selling financial newsletter written from a biblical perspective. Visit the Sound Mind Investing website .

Publication Date: June 20, 2012