A new study from women’s fashion brand Kaiia found that Europeans spend an average of 2.91% of their take-home pay on clothes. I’ll say it outright: I love this data. A while back, I criticized a major online fashion mag for suggesting a clothing budget of 5% of your pay. My recommendation was a more modest 2% to 2.5% — more in line with the average European’s budget.
But there’s more to this story, including some juicy takeaways for budget-minded U.S. shoppers. Let’s look at the highlights of the European clothing budget study and what it means for your apparel purchases.
What European shoppers spend on clothes
The Kaiia study analyzed incomes and spending habits in 20 countries. These findings stand out:
- Annual clothing spend by country ranged from 1.44% of take-home pay in Hungary to 4.02% in Estonia.
- Annual incomes in the 20 countries ranged from €20,600 in Estonia to €43,830 in Luxembourg. Converted to dollars, that’s roughly $24,548 at the low end and $52,078 at the high end.
- Luxembourg shoppers spent the most, €1,619.51 annually on average. They had higher-than-average incomes and dedicated a larger budget (3.69% on average) to clothes.
- Estonian shoppers spent more than 4% on clothes, even though their average annual take-home pay was a modest €20,600.
- Italy, a country known for its ties to fashion, did outspend the average European on clothes, but not in an extreme way. Italian shoppers took home €32,133 and spent 3.63% of it (€1,166.06) on clothes.
According to this study, overspending means dedicating more than 2.91% of your take-home pay to clothing purchases. That’s the easy definition based on the data, but it’s not a one-size-fits-all rule. The average percentage benchmark doesn’t translate well to very low and very high incomes. If you’re in college living on stipends, the 2.91% clothing budget is probably way too high. If you’re an heiress who makes millions from your trust fund, the 2.91% could be practically obscene.
Setting your clothing budget
That’s why setting your own clothing budget isn’t as simple as picking a percentage and calling it a day. The only spending guideline that works is one that fits your income and reflects how you shop. A $1,200 annual clothing budget can be on point if you’re buying well‑priced, high‑rotation pieces. But it won’t hold if you only shop at Chanel. Budgeting works best when it’s realistic, not aspirational.
Read next: The Budget Fashionista’s intro to budgeting
What a 2.5% clothing budget looks like
The average U.S. gross income as of Q3 2025 is $63,128, which translates to roughly $47,000 in take‑home pay after typical taxes and deductions. Using that as a reference point, I calculated clothing budgets for take‑home incomes between $35,000 and $55,000, based on a 2% to 2.5% guideline. See the spending limits plus the “how to make it work” tips to identify your clothing budget sweet spot.
Annual take-home income of $35,000
- Annual clothing budget = $700 to $875
- Monthly clothing budget = $58 to $73
- Where you’re shopping. Old Navy, Amazon, resale
- How to make it work. Limit yourself to one splurge purchase annually, and don’t spend more than $150 on it. Stick to classic styles that won’t go out of style.
Annual take-home income of $40,000
- Annual clothing budget = $800 to $1,000
- Monthly clothing budget = $67 to $83
- Where you’re shopping. Old Navy, Amazon, Gap (from Sam’s Club), resale, Target, TJ Maxx
- How to make it work. Focus on building a reliable rotation rather than variety. Keep splurge purchases to one item per year, capped around $175, and only if it fills a real gap — say, a winter coat or work shoes. Prioritize pieces you can wear weekly and avoid trend‑driven items with short lifespans. Borrow and trade with friends for special occasions and trends.
Annual take-home income of $45,000
- Annual clothing budget = $900 to $1,125
- Monthly clothing budget = $75 to $93.75
- Where you’re shopping. Gap, Banana Republic Factory, J.Crew Factory, Amazon, Nordstrom Rack, department store sales
- How to make it work. This is where strategic upgrades start to make sense. You can afford one higher‑quality purchase annually, up to about $200 — if the rest of your wardrobe is primarily affordable basics. Use sales and resale to stretch your budget.
Annual take-home income of $50,000
- Annual clothing budget = $1,000 to $1,250
- Monthly clothing budget = $83 to $104
- Where you’re shopping. J.Crew, Madewell (sales), Everlane, Uniqlo, Nordstrom Rack, secondhand designer, Quince
- How to make it work. You have room to be selective. Instead of spreading your budget evenly, spend first on your most-worn categories — probably jeans and shoes. Limit trend purchases and aim for high‑rotation pieces that work across seasons. Consider tailoring one or two items a year to improve cost per wear.
Annual take-home income of $55,000
- Annual clothing budget = $1,100 to $1,375
- Monthly clothing budget = $92 to $115
- Where you’re shopping. Madewell, Everlane, Quince, J.Crew, COS, Sezane (selectively), resale
- How to make it work. This budget supports a less-is-more approach if you can stay disciplined. Cap impulse purchases and plan your splurges intentionally. Track how often you wear new items. If something doesn’t earn repeat wear within a month, it’s a signal to slow down and reassess future purchases.
Your European-inspired clothing budget
A good clothing budget is about clarity, not deprivation. If you shop intentionally and focus on cost per wear, a $700 to $1,300 annual budget can support a wardrobe you love — European‑inspired, of course.