The most expensive items in your wardrobe should be the things that you wear the most. Coats, shoes, bags, and whatever else you wear/use every day should be the best quality that you can afford. Keep them clean (get them professionally cleaned occasionally) and in good condition.
A few years ago I splurged on a pair of Chanel sunglasses which were (well, let’s just say they cost a lot). However, I wear them almost every day, I love them, and for me this was money well spent.
When I am considering buying a new bag, I ask myself, “Will I have this forever?” If the answer is no then I usually walk away because bags are a) incredibly expensive and b) ideally of high enough quality that they can last forever, so I don’t want to spend a lot of money on something that won’t be around for long. I’d rather have one or two really nice bags than a whole bunch of not-so-nice bags.
I think most of us have a uniform, which may be jeans or suits, for example. Mine is skirts since this is typically what I wear to work. We all deviate from this of course, but I think it’s helpful to identify what it is that is easiest for you to pull on in the morning and feel good about, and pay attention to those pieces as they will be what you wear the most. In particular, think about your uniform when buying things. For example, if you wear jeans most of the time make sure that your most expensive shoes are something you can wear with jeans.
For basics like button-up shirts, pencil skirts, and solid-colored sweaters, buying online (for example, at bananarepublic.com and jcrew.com) can give you better selection of colors, styles, and sizes than buying from the brick-and-mortar store. Only buy from a store that you have easy access to so that you can return things easily. I prefer not to buy pants or jeans on-line as I usually have to try a zillion of these on just to find one pair that works.