I liked AviaMariah's advice: try buying the more expensive bag and see how you feel as you use it. This is the best way to determine what is right for you.
I am not a huge "bag lady"; I am more about shoes. I used to spend only $30-50 on a bag, which would generally last me about 6 months of everyday use. These bags were faux leather, and the leather would eventually crack and the stitching would break. So in the trash they went.
I asked on the forum about buying a real leather bag, which meant a higher price tag, and the advice I got was that they are worth it, because they last for years.
So I bought my first leather bag a little over a year ago. I think it was maybe a $200 bag, but I got it for $150. I loved it! I was able to use it for months, and the stitching didn't break and the leather didn't crack. I loved it so much that I bought another leather bag in the spring of this year, again for about $150 or $175. I absolutely love it! It really elevates my outfit and makes me feel dressy, even when my outfit is simple.
So my vote is to try it and see how you feel. I do think that we can allow ourselves a few emotional purchases. Something like a bag will be used a lot, so I think it's understandable to spend more on it. If you think of all the labor that goes in to making a nice bag, it makes sense that they will cost more.