Be sure to check out Part 1: Identifying Your Look!

So you want to live stylishly. Great! Now comes the tricky part: sticking within a budget.

You can easily spend $500 on a pair of great shoes or a beautiful scarf, but should you? Well… yes, there are some designers and pieces that are worth every penny, but not every item in your closet should be pricey! It should be a select few quality pieces that you pay a high price for, and you are better off lowering your budget considerably for the rest of your wardrobe.

But how do you figure out the amount that is reasonable to spend on clothes and accessories?

Think of it like a formula (hey look, fashion can teach us math!). Let’s say your income is a modest $2,500 / month, and your bills and general expenses are $2,000 / month. This gives you $500 left over, which is easy to deal with: $200 can go into savings, $200 can be kept as a buffer or an emergency fund, and $100 can go towards your fashion budget. Depending on your circumstances, you can shift things around and just put $25 or $50 each month towards your fashion budget (but I would recommend that at this income / expense level, not to go over the $100 limit).

Now things are starting to look good. Assuming that your wardrobe is the main priority you want to focus on as the “extras” in your life, that $100 / month is going to add up to a whooping $1,200 for the year. Not so shabby! And if you’re playing it safe with a lower amount each month, that can still mean $300 or $600 to spend for the year.

Which items should I spend money on?

This entirely depends on the climate you live in, what your work life is like, what your lifestyle focuses on, and what you already own. But here are some general tips:

• If you can spend up to $1,200 on your wardrobe for the year, make one of them a more expensive (read: QUALITY) item. Invest in a great coat, shoes that will last you more than just a season, a dress that can be worn at formal and informal events alike, or a pair of classic pants that you can wear regularly. The key, when it comes to purchasing an expensive item on a budget, is that you are purchasing something that you can wear on a regular basis. It’s a high-quality item that makes you look and feel great and isn’t going to fall apart in six months. Among my expensive items are Prada heels that go with any dress or skirt, Jimmy Choo flats that I wear every day at the office, an Hermes scarf that goes with any monochrome outfit, and classic sterling silver Tiffany earrings. Make your “treat” worth it!

• If you can spend up to $600 on your wardrobe for the year, weigh your options carefully. With the $1,200 limit, you can purchase one “big” item and still have at least half of it leftover for a few other necessities. But with the $600 limit, it really depends on what you already have in your closet. If you’re already pretty well established, then by all means spend it on one great piece, but if your wardrobe needs fleshing out, you’ll do better to buy three to eight fairly-high-but-not-to-a-ridiculous-extent-quality items. Think blazers, blouses, pants, and skirts.

• If you can spend up to $300 on your wardrobe for the year, go for smaller but meaningful staples. This is the time to assess what’s lacking in your wardrobe and what you’re going to really need over the next year. Purchase two to five items that you love and can mix and match with a number of different pieces.

How do you determine how much to spend? What will your preference be when prioritizing items with your fashion budget this year? Share in the comments section below!