‘Amr ibn Shu‘ayb narrated from his father from his grandfather (radiyallahu ‘anhu) that the Messenger of Allah ﷺ said:

كل واشرب، والبس وتصدق، من غَيْرِ سَرَفٍ وَلَا مَخِيلَةٍ

“Eat, drink, wear clothes, and give in charity without extravagance or arrogance.” (Reported by Ahmad, Abu Dawud and al-Bukhari in mu‘allaq form).

This hadith encompasses the use of wealth in beneficial matters for both religious and worldly affairs, and avoiding harmful matters. Allah has made wealth essential for His servants, through which their personal and communal, religious and worldly affairs are maintained. Allah and His Messenger ﷺ have guided to the best ways to acquire, use, manage, and spend wealth, leading to the best outcomes both in the present and future.

Allah has guided the people to seek wealth through lawful and beneficial means, ensuring that the pursuit is dignified, without laziness or overexertion that disrupts one’s condition. Also, that one avoids forbidden and lowly sources of income. Once obtained, wealth should be preserved and used appropriately for eating, drinking, clothing, and other necessary matters for oneself and one’s dependents, such as spouses and children, without being miserly or wasteful.

When spending on others, it should be done in ways that benefit the recipient and bring reward and goodness to the giver. This includes charity to the needy from relatives, neighbors and their likes, and giving gifts and invitations as per common customs.

All of this is conditional on avoiding extravagance and arrogance, as stipulated in this hadith, and as mentioned in the verse:

“And those who, when they spend, do so not excessively or sparingly but are ever, between that, [justly] moderate.” (al-Furqan 25:67)

This is the balance in managing wealth: to be moderate between stinginess and wastefulness. By this, matters are rightly conducted and completed. Anything beyond this is sinful, harmful, and a deficiency in intellect and condition. Allah knows best.

Source: Bahjah Qulub al-Abrar, Explanation of Hadith no. 94.