Some people get into debt by buying things they do not need and cannot afford.What are the reason for this? What action can be taken to prevent people from having this problem?
Many stories of extravagant life are just urban legends, but many others are true. Purchasing unnecessary-pricey goods could get people into debts. Although the reason why such situation can happen is because of the social status of certain people, government can make some rules to prevent the citizens from buying fancy things.
Social status is the main reason cause for people to buy extravagant goods. Such status might force some people to be friends with their mutuals, and following the trends is inevitable. For example, the bourgeoisie in Jakarta could make 100 fancy bags produced by Victoria Beckham sold out in just one day, and this also happen with other elegant goods. This way, they might be in a prosperous life.
Government could play a pivotal role in controlling people's consumption on fancy goods. They can impose higher taxes for extravagant items like bags and private transportation. For example, Singapore government makes owning a vehicle is extremely expensive through high taxes in about 100% for a car. Thus, the nouveau will consider properly if they want to buy luxury items.
To conclude, the rich would likely buy high-priced goods because of their social status which demand them to be wealthy. However, rules can be made to control this behavior. If these rules can be implemented properly, people will ruminate to buy extravagant items which are good for their lifestyle.