When to Splurge and When to Save

Recently, I shared with you all that I bought my first luxury item totaling in at $995. If someone handed you that amount on the street, it might as well be Christmas! As my first truly “splurge” piece, it got me thinking about when it works, and when it doesn’t.

Like most people, I’m always trying to save money. Especially when it comes to clothing and fashion trends that probably won’t be around in 6 months. When I was younger (read 22), I was most definitely on the fast fashion train. Purchasing items I didn’t truly love just because they were cheap and I was bored. Note that I said cheap, not affordable.

As I got older (read, 26) I started getting very frustrated with my closet, bank account (where was this money I was making going), and even more surprisingly, the amount of just junk that I purchased and then would toss out a year later.

This realization over the past few years has forced me to change my perspective on what I purchase and it’s made me make some choices that I definitely wouldn’t have made in the past. So, here are my tips on when to splurge and when to pass.

When to splurge:

3x or 10%: You can pay for it three times. If you purchase something that’s $500, you should have a minimum of $1500 left in your bank account. In 2020, I’m trying an even more challenging rule which is don’t spend more than 10% of your savings. So if you purchase an item that is $1000, you better have $10K in your bank account before swiping that card. We’re not going broke for fashun.
CPW – We’ve talked about this before but just as a reminder, you always want to make sure you’re getting a good cost per wear on an item. Say you purchased a super trendy blouse that’s $120 and you wear it twice. Your CPW is $60. Now, say if you purchase a more basic blouse but well-made for the same price, and you wear it 5x a month, your CPW is $24. The lower CPW, the better the investment.
Investment Pieces only – An investment piece should be timeless not trendy. If you want to get the most out of your wardrobe, spend more on quality items you can wear more. A staple button down, a perfectly tailored blazer, a sturdy black pump are closet must haves that will never go out of style. Plus, you won’t waste money on purchasing the same item next year because it should be made to last. Buy them once and keep them for years to come.
Rent it instead – This isn’t a pitch for Rent the Runway, but I truly believe that I’m able to save money by renting high quality pieces through the program for a set fee. I definitely love the feel of higher end pieces but I’m not going to put down $400 for a dress especially if I have the option to rent it. I’ll share more about this later but it’s all about getting your money’s worth!

I hope these tips are helpful and you make better spending decisions. We’re being fiscally responsible in 2020!