Al-Adab al-Mufrad 445 — The Spendthrifts

Benefits and Issues:
➊ From these narrations, it is understood that spending in the path of truth—that is, on permissible and rewardable deeds—no matter how much is spent, is not extravagance. The real extravagance is when a person spends in places or in ways where Allah Ta'ala has not permitted spending. In other words, to spend for the disobedience of Allah Ta'ala and to cause corruption is extravagance.
➋ The difference between a generous (jawaad) person and an extravagant spender is that a generous person spends wealth with wisdom, in places where there is benefit and where expediency demands, and he is mindful of fulfilling obligations. In contrast, an extravagant spender wastes wealth in permissible and impermissible matters without any expediency.