Is excessive spending in charity considered extravagance, and is saving forbidden, and how can one reconcile generous spending with the prohibition of extravagance?

Moderation is required in spending and in all matters. Charity and spending on good deeds do not fall under the prohibited extravagance, especially if the doer is patient and content. Many Companions donated most of their wealth, and some donated all of their wealth, and the Prophet, peace and blessings be upon him, approved of them doing so. There is no harm in a person donating all of their wealth for the sake of Allah Almighty, provided that they are content with it, do not regret it, and will not need it in the future for themselves or for those whose maintenance is obligatory upon them.

Extravagance is spending on what is unlawful or in disobedience to Allah Almighty. The wasteful are brothers of devils in corruption, because they spend on falsehood, evil, and sin.

Saving money is not forbidden, and there is no harm for a Muslim to strive to acquire lawful money and save it for their needs. The Prophet, peace and blessings be upon him, said: "Excellent is lawful wealth for the righteous person." As for what is narrated that the Prophet, peace and blessings be upon him, did not save anything for tomorrow, some scholars interpreted it as him not saving anything for himself, or not saving anything that would quickly spoil, as it is confirmed that he used to keep for his family their sustenance for a year.