Let me start by admitting this: I am a bit of a nosy parker. I am fascinated by how other people live – the way they decorate their houses, the clothes they buy, their finances. The latter in particular is something of a taboo subject outside of Personal Finance blogs, so my nosiness on that score is infrequently satisfied. For that reason, I love online discussions like this Reddit sub-thread on income level and clothes spending. The wide range of responses is very interesting, as are the related comments that come up – such as, for example, on the topic of lifestyle inflation. They got me thinking about my own life … and so this blog post was born.

I have absolutely no doubt that lifestyle inflation is a real thing; I’ve got all the proof I need when I compare my life a decade ago to my current situation. Take my recent trip to Mexico as an example. Back in 2007, I went on an all-inclusive vacation to Cancun – and stayed at a 3 star hotel. Last month, the four of us stayed at a 5 star resort on the Mayan Riviera. Same general location, a not insignificant difference in amenities … and cost. I’ve been trying to decide whether lifestyle inflation has crept into my clothes spending as well. If I use the same time period for comparison purposes, I think the answer is unavoidably “yes”. But if I look at the last 3 years or so, the answer is less clear.

For perspective, here are some relevant stats. Since 2013, my personal income has increased by about 50%. During that time, my clothes spending (in absolute dollars) has remained surprisingly steady, varying by no more than 10-15% from year to year. (I did not track or keep a consistent record of my clothes spending before 2013.) The average cost of the clothes I have purchased has steadily declined – from $40/item in 2013, to $16/item in 2016. Meanwhile, the average retail value of the clothes has increased – from $113/item in 2013 to $218/item in 2016. Those numbers represent, in a nutshell, the trend in my clothes spending: buying better (or at least more expensive) brands predominantly secondhand.

But what about lifestyle inflation?

In some ways, it hasn’t affected my clothes spending. After all, on average, I spend less per item now than 2-3 years ago even as my income has increased a fair bit. But that is not the full story. Averages are tricky things … especially when you buy a lot of things, like I do. Masked among my many thrift scores are some “big ticket” purchases that, not that long ago, would have seemed pretty scary. The biggest upward creep in my spending comfort level definitely happened with bags. Spending $500 on a bag doesn’t faze me like it used; I don’t do it regularly, but it’s an easily conceivable notion. My “knuckle biting” threshold for bags is now probably north of $700. Shoes are another category where my thresholds have changed quite significantly. I used to baulk at spending more than $50 on a pair of shoes; now, while I routinely spend less, I am nevertheless mentally prepared to spend up to $200 on a brand I love (like Manolo Blahnik, Frye, etc.). Same thing with outerwear, thanks to my beloved MaxMara camel coat.

At the same time, thrifting has had its own impact on the progression of lifestyle inflation in my clothes spending. The best way I can describe that impact is this: thrifting has made it easier AND harder for me to spend $50 (or more) on a piece of clothing. On one hand, I find it harder now to justify spending more than $20 on anything, because that’s usually the upper limit of thrift prices regardless of the label. On the other hand, if I do find something truly special, spending $100 or even $200 on a single item seems, well, not unreasonable given how little money my thrifting costs me (and considering that it accounts for 90%+ of my shopping). I think that, on balance, the influence of thrifting on my spending mentality is largely a positive thing. I constantly question the value of the things I’m tempted to buy, and am far less likely to be swayed by sale prices and promotions. It has made me more aware of things that are worth the (retail) splurge — boots, outerwear, and good sweaters for example (things that people tend to hold on to, rather than donate before they wear out). Thrifting has also made me more comfortable with the idea that, sometimes, you just have to get the thing that sparks joy, price be damned.

Within reason, of course.

Now, tell me: have you noticed lifestyle inflation in your own life? How do you deal with it?

16 Comments on State of the Wardrobe: Lifestyle Inflation & Clothes Spending

  1. I was just pondering this morning about my wardrobe. I have access to much more money than 5 years ago and I’m in less precarious a position, stability wise. 15 years ago I had a wardrobe of cheap clothes. Cheap in quality and price. My average clothing item did not exceed $20. Usually averaged $12. They were ill fitting and looked crappy. But that didn’t matter to me because my figure was more firm so everything looked better. And now, if I were to wear those things I would look completely frumpy. I need clothing with more structure. Slacks and not leggings. Jackets and not fleeces. That’s a fact of being middle aged and looking appropriate. Good quality clothing, even not designer, costs a lot more. So my fashion is restricted to clearance on already marked down items but at mid-level retailers such as Ann Taylor. So my pants cost $30 but have $120 msrp, so to speak. At least the creep isn’t outrageous, but only because like you, I am judicious and concentrate on the value of getting a better quality garment at some kind of discounted price. My handbag spending has surged much higher. It used to be $40 and now I’ve gone to $180 as my priciest bag. But keep in mind, I also got it at discount by about 60 percent off and it’s designer and leather. I have several though, because I’m super fickle about my purses. So I do know my overall handbag budget must look insane. I’m trying to do better on that front haha. Also on a general clothes buying moratorium. Because I feel like fashion is once again moving away from my comfort zone, style-wise. So I will likely wear what I have for the next decade comfortably.

    • There is no way your handbag budget looks more insane than mine 😉 Although I’ve noticed that in the last 3-5 months, I’ve been less interested in bags than before. I basically rotate the same 2-3 bags most of the time, which is a record (low) for me. I still consider myself a “bag lady” … but that may yet change.

  2. Finally last year I stopped shopping so often. That was a huge thing for me because I grew up with not much and spent my twenties and early to mid thirties trying to compensate. My wardrobe was bursting and I was not necessarily dressing to my full potential. Last year I quit and began weeding out my wardrobe getting rid of old items I had hardly worn, because that day would never come. These days I will go shopping far less often but spend more and buy better. I am so much happier. I don’t bother shopping unless I have a firm idea in mind of the wardrobe gap I am trying to fill and I have gotten way better at talking myself down off a ledge when confronted by a reduced designer handbag, for example. Shopping if meant to be fun and functional but for years for me it was a coping mechanism. Now I took up piano and that has given me something equally exciting to do with my free time. I also got a puppy. I can’t tell you the difference in my happiness. And I think I dress better because I can actually see what I’ve got now.

    • I find that same thing happened with me after I stopped shopping at the mall, and looking at tons of fashion blogs. I still impulse buy at the thrift store, but there my impulses are guided by my own preferences more than by what’s trendy or what someone is trying to sell me. So, for better or worse, my closet now generally reflects my own style which makes it easier to put things together.

  4. Love this post. I always enjoy your fashion posts, but I like these contemplative posts just as much, as well as the insightful comments from other readers.

    I’ve noticed as I hit my mid-30s that I spend more on bags and shoes and jackets/blazers, but way less on some top that’s a trend du jour.

    I’m also less willing to spend hours at the mall aimlessly trying things on like I would do in my teens and 20s. My time feels more valuable now. So I’ll spend more if upon trying it on, I immediately like it and feel confident that the piece will work for me for a few seasons.

    All that said, I have not found one store that offers the happy medium of both quality materials and decent prices! Where is that store? I feel like I have to spend so much time hunting for deals at pricier stores or diamonds in the rough at cheap stores. I wish there were one store I could walk into and feel confident that I would like most pieces AND be able to comfortably afford them.

    • I hear you, and I don’t know where that store can be found. One of the things I realized I HATE about spending a lot of money on clothing is seeing go on sale right afterwards. That’s why I rarely take any risks buying things even after the first (sale) cut. Retailers are to blame for that … they’ve trained us to mentally discount retail prices because of the ubiquitous sales. So a store that sold good quality at commensurate prices might not get my business unless I absolutely knew that the price wasn’t going to be discounted at some point. I think MM LeFleur has that model, but unfortunately they don’t ship to Canada.

  5. Between when I was in law school (2015) and now, I’ve actually had a bit of lifestyle deflation when it comes to the total amount I spend shopping for my wardrobe. Some of it is that I did some big ticket purchases (winter coat, winter boots) at the end of 2015, but I’d like to think that some of the decreased spending comes from my having learned to be more careful about shopping! I’ve also had some lifestyle deflation when it comes to makeup and skincare spending (more emphasis on drugstore-priced skincare; avoiding impulse orders from Sephora, and, in particular, avoiding the dangerous effect of adding small items to get to the Sephora free shipping threshold).

    My willingness to spend more per item has gone up, which I think is similar to you and some of the other commenters.

    In other spending areas, I’ve seen some lifestyle inflation, most of which I think is reasonable. (It’s no surprise that my rent went up when I moved out of subsidized student housing, for instance, and that accounts for most of the spending increase.) I’m fairly certain that it wasn’t as much lifestyle inflation as most newly working graduates see when they graduate into a fairly high-intensity and high-earning profession, and I offset it by frugality in other areas. (Not much time for “entertainment” like concert tickets or movie tickets now, and my food spending and public transit and other transportation spending went down because of subsidies from the firm.)

    I do end up feeling a little guilty about the lifestyle inflation on rent. K and I, because we’re splitting a 1 bedroom, spend less than most of our peers (who live in less “luxury” buildings, but live alone in studios, which come at a premium in NYC), but we’re paying a slightly stupid amount for our apartment, given the neighborhood.

    • It’s all relative at some level. If that is your only major splurge, and it’s what matters to you, then why not? As I said to Liane, most of us can’t realistically splurge on EVERYthing that we might like, but we can still prioritize what’s important.

      I thought I was the only person who avoided Sephora like the plague, LOL! That place is so, so dangerous.

  6. Are there personal finance blogs you follow? I’m always interested in new ones. How did you get interested in PF?

    Do you think lifestyle inflation is always a problem? I’m completely on board with the anti-consumerist and the environmentalist reasons to limit it, but I’m also not one of these hardcore people you run across online who thinks there’s no place for material comfort if you’re saving less than 75% of your income.

    I’m asking because I’m trying to figure out how to strike that balance in my own life. I more than doubled my salary in the last few years by finishing grad school. I’ve absolutely experienced some lifestyle inflation…..but living on 30k in NYC and trying to save was really tight, so I don’t feel that bad about moving the needle a little upward. I’m pretty happy about our savings rate but we’re reaching a point where we might have to think about a new apartment (for bureaucratic reasons), and I feel that’s where the real danger of lifestyle inflation comes in. I don’t really want an enormous swanky apartment but it might be nice to no longer live in a studio with my husband and our dog in our 30s, you know?

    • I don’t follow many anymore, and the ones I do follow are written by people I know from a previous “life”. Save Spend Splurge, Money After Graduation, Boomer & Echo are a few. I used to read Gail Vaz Oxlade (a well-known Canadian PF personality) religiously back before I had kids and was in “nesting” mode with my money (probably because we had just finished paying off my husband’s student loans and were facing a maternity leave). That’s how it all started. Many of the OG PerFi bloggers from back then (2009-2010) are no longer around.

      I don’t think lifestyle inflation is always a problem, no. I am definitely a “save for a rainy day” and “don’t spend what you don’t have” kind of person — my parents drilled that into me from an early age — but I am also increasingly cognizant that life is short and there are no guarantees. I want to be in a good position come retirement … but I also want to enjoy my life NOW, because there might never BE a retirement in my future (aka I could die tomorrow). So I save … and I splurge. I think the key is knowing that you can’t have EVERYTHING. I prioritize where I spend my discretionary income, so I feel like I splurge on the things that matter, rather than spend a little bit on everything and never feeling fully satisfied. Does that make sense? Like, we drive one car but I buy all the books.

      I think being “house poor” is a real problem these days, and it’s something we’ve made a very conscious effort to avoid. Believe me, there have been MANY times when I’ve lusted after others’ much nicer (bigger, newer) homes … but then I remember that we have a relatively small mortgage, and even that cannot be gone soon enough. But generally I am happy with our (smaller but still nice) house, so I think there is definitely a happy medium there too 🙂

  7. One practice that has helped me analyze my shopping habits is keeping a list of what I am giving back to the thrift gods, and why, and what it cost me. I’ve learned a few things from reading through the list, like no matter how cute the garment, I’ll never feel happy in brown or pink. But the price analysis is interesting – I learned that my danger zone is actually about $30-40. Anything below $20, I have enough hits to more than justify my misses, and some of my favourite items have been things I hesitated over in the store. Anything above $50, I still think carefully about and make pretty good choices. But my slightly better financial situation can make discounted but not thrift level prices of $30 to $40 (usually at Winners) seem like no big deal and impulse buys, so I’ve resolved to be more analytical in that price range.

    • Very interesting. I think I have the same weak spot with things in the $30-40 range. I have largely stopped going to places like Winners for that reason. You` have convinced me that I need to keep better track of the things I purge, to see what trends are observable. I do pay a lot of attention these days to the colours of things I buy, even since I developed my wardrobe colour palette. But I should probably pay more attention to other details as well.

  8. I’m late to this, but I love the phrase that encapsulates a “feeling” I’ve had and not been able to fully articulate. It makes me feel both glad that I’m no longer scraping by on a graduate student stipend, and also anxious that it costs so much more to keep me in “lifestyle to which I’ve become accustomed.” I want to talk to my husband about it, because while he’s certainly aware of the increase in our incomes over the past five years (when we’ve both worked very hard to launch our careers), I’m not sure he’s concerned about the extent to which our spending has kept right up with our increased salaries. Of course, we’re also spending a considerable amount of take home salary on quality child care (I live in the US), so that’s a budget consideration that keeps us feeling frugal in some other areas (I’m not ready to spend more than $150 on a handbag, but I don’t immediately click away from the spendy ones that I admire the way I once did when they were unimaginable instead of “Well, that’s a bit out of my price range…” I also find it’s very easy to spend money on clothes for my children (girls ages 2 and 4), though they don’t need them and won’t wear them for more than a year or two at the most. But I feel like I have to justify any clothing purchases I make for myself, and in large part thanks for your blog, I’m making much more of an effort to buy consignment or thrifted clothes, for both me and the kiddos.

    • Kids’ clothing is such a rip! Even “fast fashion” is getting so expensive, when you consider the cost-per-wear. My kids live in t-shirts and leggings/sweatpants because they love to run around, and they rip through everything so fast — if they don’t grow out of them first! I try to buy their nicer, “special occasion” clothing at consignment, but I should really focus more on thrifting for them.

      As far as lifestyle inflation, I think there is a big difference between that and lifestyle expansion. Once you add kids to the mix, everything gets more expensive, even if your actual spending habits don’t change. So my family spending now is a combination of both of those things: lifestyle inflation and lifestyle expansion. There’s not much I can do about the latter now (there’s no return policy on kids ;)) and I try to be as conscious as possible about the former. I think some lifestyle inflation is fine, but then again I am not aiming for a retire-by-40 situation.