It is correct for a person to conduct himself in an average way when regarding the type of clothes that one buys. What way that is depends completely on what is expected from him in his place and according to his stature. Even if Hashem has favored him with wealth, he should not wear wealthy extravagant clothing, for many reasons: 1) By doing so he transgresses the prohibition of “Do not waste!”, 2) It causes him to become arrogant, 3) It excites the evil inclination and encourages the evil eye, 4) It causes others who cannot afford these clothes to feel like they have to imitate him, and they will end up either borrowing and not repaying or stealing. Ideally the leaders of the community should notice and institute limits and decrees for the purpose of helping the town and the whole world. One should learn from the elders, who made many decrees to help the world or to increase peace. In many place we find that Chazal obligated the rich people to deliberately diminish their own honor so as not to embarrass one who is not wealthy.
