I dress mostly to fit into an environment.
If I don't have to go anywhere, I wear jeans and comfy sweaters. In the summer I wear a lot of very casual cotton skirts with sandals because they are cooler than jeans. I don't consider the mall, the grocery store, the bank, etc, places to dress up in. I don't dress up when I go out with friends for pizza, when I have friends over, or when I go to their houses for dinner. I do dress up if I go to a wedding, a classical concert, or a restaurant that is more than casual dining. I dress up more often when I visit larger cities than I do in the small town I live in now. In other words, I dress to blend. :D
When I shop for dresses, skirts, sweaters, etc, I do have an eye for fashion and I choose (obviously) outfits that are current, that appeal to me, that look good on me, that are good quality material (I'd rather have 2 good skirts than 5 cheap ones), and that are suitable for my age (no more short, short skirts and skin-tight tops, or shorts in the summer).
At work, I wear skirts and nicer sweaters or blouses, jackets, etc, to look professional. I don't wear high heels. There are plenty of very stylish flats or 1" heels around and I want to be comfortable. It's not cold yet, but this winter I plan on stocking up with a few nice pairs of slacks to wear to work.