>>why do people buy things they can't afford and most often don't need, putting themselves in this position?

Irrationality. They don't think the situation through.

"Do you know that my personal crusade in life (in the philosophical sense) is not merely to fight collectivism, nor to fight altruism? These are only consequences, effects, not causes. I am out after the real cause, the real root of evil on earth — the irrational." - Ayn Rand

Bad things happen to people when they decide to put their feelings above rational evidence and thought.