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How much money should you spend on clothes and eating out

Question: How much money should you spend on clothes and eating out?

by Roman on April 13, 2010

Today’s question comes from Mandy June from California, USA.

Her question is:

As a part-time worker and full-time student, how much of my salary (percentage) is okay to spend on things like clothes or going out to eat each month?

This is a great question! A lot of people are trying to figure out the exact same thing every day in their life.

Sadly for Mandy June there is no one and definite answer to her question. I will do my best however to give a good answer.

Things to consider

In order to answer Mandy’s question there are 2 important factors that we should take into account.

  1. How much money do you make
  2. How much of it do you have to spend on fixed fees.

Unfortunately for us, we do not have this information at the moment, so I’ll have to do my best with the facts I have.

The money you can’t afford NOT to spend

While everyone should know how much money they make I’d like to talk about the money we can not afford to leave unspent.

If we could spend all the money we make, most of us would be very well off. Unfortunately, most of us have to take care of the necessities first.

In Mandy June’s case we would need to know about the expenses she absolutely has to take care each week before spending her money on anything else. Things like the rent she needs to pay and the fees for her school. These are a few things she has to take care before she can go shopping for clothes or thinking about eating out.

Some more necessities to take care of before spending what you have left:

  • Rent or mortgage
  • Utility costs – electricity, water etc
  • Food (not eating out but just the food you need to survive)
  • Car payment and Gas
  • Credit Card payment
  • Insurance
  • Expenses on children (if you have any)
  • Any other fixed fees we could have

Only after paying all of the above can we start thinking about spending money on clothes and eating out. In Mandy June’s case we can probably assume that she has all these already taken care of.

After getting your paycheck and paying for the necessities you are usually left with some money. How you use this money can make the difference whether you end up as a millionaire or file for bankruptcy.

What are your financial goals?

Since Mandy June is a student we can probably safely assume that she works to put herself through school. We don’t know whether or not she’s trying to save money for buying a house or perhaps saving for her retirement.

In order to determine how much we should spend on our clothes and for eating out each month we should first have a goal of how much money we want to save each month.

After paying for the necessities and saving (or investing) the amount of money you have predetermined you can spend all the rest.

Good advice to consider

Whatever your financial goals I believe that one should live her life and adjust her spendings in a way that she will constantly keep getting richer.

Net Worth

The best way that I know of is to start calculating your Net Worth. A net worth shows how much you are worth in dollars. It only takes into consideration the facts of how much you have and doesn’t take into account how smart you are or how much you think you are going to make. This is why it is the best indicator to measure your financial success and whether you are getting richer or poorer.

If you want to know about how to calculate your own net worth you should read the article “How to Calculate Your Net Worth? With Examples!

F*ck You Money

Another thing to consider is to save enough money for whatever might happen in the future. This is called F*ck You money.

F*CK Y*U money is typically measured in months or years – how long can you live using your reserves without changing your lifestyle?

Having enough cash reserves to continue your lifestyle for 6 months should be the goal for everyone. Having reserves like that will make you more confident. It gives you the ability to quit your job when your boss starts harassing you or not worry about being fired. If you have 6 months to find a better job you can be confident that you’ll find the work of your dreams. You can check out my article about f*uck you money here.

My answer

Here is Mandy June’s question:

As a part-time worker and full-time student, how much of my salary (percentage) is okay to spend on things like clothes or going out to eat each month?

My answer:

It is OK to spend as much money as you like while at the same time making sure your Net Worth or cash reserves grow each month. This means that you can buy yourself things and eat out but at the same time you will get more rich every week and month.

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Car Insurance Phi April 15, 2010 at 11:18 am

Great answer! Many of us run into this problem and I think it varies by person. Some people will want to save more for later on in life while others want to continually spend. It’s up to you!

Roman April 16, 2010 at 8:17 am


most expensive August 1, 2011 at 12:07 pm

i’d like to objest, your answer seems logical but whats the fun of life if we pigeon hole ourself with so many restrictions. i think one should do what he/she links to do. i dont care much about my clothing but i never stop myself when i want to eat some food or try a new restaurent.

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