Kind of leaving it to the last minute aren't you?
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1. Am I thinking OK here, or more accurately, should I be justified at being shocked by the price tag on a bag?
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It's your dime and your wife. If you can afford it why not, it's her birthday.
My oldest daughter is into Coach bags and they run $300 up and her boyfriend has bought her two so far.
Personally I won't buy Levi's because I think they cost too much, but I have wasted money on my wife before just because.