I have a "closet recycle" system that I use on my clothes. When I buy a new top or dress I wear it formally a few times then it goes into my casual section. This way I get the best return on investment for most of my clothes.
This hot pink shirt is a good example. When I first bought it I paired it with a dressy short skirt, pumps, and accessories for a formal dinner. Now that it got retired from that department, I wear it with shorts and flats or with jeans for casual outings.
Top: BCBG Max Azria