The religion of Islam is the religion of life and its precepts and rules set the grounds for human felicity and success, both for the individual, as well as the society. Islam has brought forth a complete program for every facet of human life and has advised balance and moderation to its followers in all affairs. Extravagance and waste means going past the proper boundaries and is the opposite of moderation.
And [they are] those who, when they spend, do so not excessively or sparingly but are ever, between that, [justly] moderate.
Indeed, the wasteful are brothers of the devils, and ever has Satan been to his Lord ungrateful.
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.
The method of determining whether or not an action is counted as Extravagance 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 with Extravagance . 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 and Extravagance unless there is a legitimate reason for it that is recognized by Islamic teachings.
May Allah save us all from this Sin. Aameen!!