I think most of us have extravagances. We just don't all spend our money on the same things.
I suppose to some degree my car buying is about extravagance but in a different way. I choose to drive a Mercedes SLK. I could technically afford a new one but I just wouldn't spend £40k on a car. That to me is scandalous. So I set a budget and buy an older version to be able to drive what I want. Even so people do call me out for driving a "flash motor" but my flash motor is invariably less to buy than their newer car. They see the badge but not the price tag.
I definitely don't see handbags as just something to cart my gubbings around in. The handbag is part of my outfit. And I would no more carry a black or pink handbag if I was wearing navy and yellow than I would wear black or pink shoes with it. Part of that though is about my job and the image that goes with that but it does extend into my home/personal life too. I cannot fib. )