Extravagance, as defined by Islamic scholars, is to exceed the proper limits in anything. These limits will differ according to various considerations and circumstances.
Allah says: “Those who, when they spend, are not extravagant and not niggardly, but hold a just (balance) between those (extremes)” [Sûrah al-Furqân: 67]
Extravagance – which is to exceed the limits of what is required or what is customary – is something prohibited. Those who do so will be counted among the spendthrifts, about whom Allah says: “Verily the spendthrifts are the brothers of the devils.” [Sûrah al-Isrâ’: 27]
On the other hand, miserliness, spending less than what is required, is also something which is prohibited.
What is needed is a just balance between the two extremes, the good and noble middle path between two evil tendencies.
It is an act of extravagance to eat more than what is needed. Whoever eats more than his fill has behaved extravagantly, especially since he is doing something that is injurious to his health. This is prohibited.
Allah says: “Eat and drink but be not excessive.” [Sûrah al-A`râf: 31]
The same principle applies to everything else. Whoever exceeds proper limits will be deemed as extravagant. It does not apply only to overspending.
A person should avoid being extravagant in all matters. This includes his food, his drink, his clothing, his conversation, his spending, his sleeping, his hygiene, his laughing, his joking, his praise and his criticism.
The method of determining whether or not an action is extravagant is to consider whether it exceeds what is needed or exceeds what is customarily regarded by the people to be within acceptable limits.
For example, if a person needs a certain amount of clothing, but goes on and buys what is clearly in excess of his needs, then he has acted extravagantly. This is determined by what people customarily see as normal or as excessive.
For any type of spending, there will be a limit that people customarily see as a proper amount. Any spending above this limit will be excessive unless there is a legitimate reason for it that is recognized by Islamic teachings.
Therefore, something could be extravagant at one time but not at another. It will vary according to a person’s needs and circumstances, and these things can change form time to time.
In some cases, a person may spend a certain amount and be considered perfectly justified in doing so, while another person who spends the exact same amount in the exact same way will be considered extravagant.
For instance, if a poor man spends one thousand riyals on a certain purchase, his spending might rightly be deemed extravagant, while a rich man making the same purchase or even a more expensive one will not be acting extravagantly at all. This is because the needs and circumstances of the rich and poor are different.
May Allah guide us all.