`Eid, in Islam, is a day of joy, thanksgiving, worship, brotherhood, solidarity, and morality. A Muslim should take the advantage of this day to bring himself closer to Allah, the Most High.
Firstly, we’d like to maintain that the majority of scholars of Usul al-Fiqh say that there is no difference between Sunnah and mustahabb (recommended act), as both of them means some thing religiously desirable for which a Muslim is rewarded if he does it and does not deserve punishment if he neglects it.
In `Eid, wearing one’s best clothes is recommendable. It is reported on the authority of Jabir (may Allah be pleased with him) who said: “The Prophet (peace and blessings be upon him) had a Jubbah (cloak) that he would wear on `Eid and on Fridays.” Also, Al-Bayhaqi reported that Ibn `Umar used to wear his best clothes on `Eid.
So, one should wear the best clothes he has when he goes out for `Eid. If one is able to buy a new one, it is much better, otherwise he should wear his best clothes as illustrated in the aforementioned reports.
May Allah guide all to what pleases Him