Budgeting 101: Tips to be Stewards of Our Wealth

Budgeting is an important practice in Islam because it helps individuals to manage their financial resources effectively. There are multiple reasons why we as Muslims should prioritize budgeting. Some of the more common ones are planning for the future or avoiding debt unless it is absolutely necessary. It is completely reasonable then to plan for the future so that you have funds set aside for rainy days, or even days when the world decides to shut down on itself.

In Islam, avoiding extravagance is important as it is considered wasteful and heavily frowned upon. We live in a society that values materialism and overspending on things we may or may not need due to us perceiving it as a mark of wealth or the common saying: “TikTok made me buy it”.

It is becoming easier to tap our phone screens and purchase things without a second thought because of the advancements of algorithms continuously tracking what we search, watch, and talk about in our day-to-day conversations (yes, I truly believe they are listening!). Not to mention payment systems are also becoming easier to use. Gone are the days I have to get up from my very comfortable position and find my wallet for my cards. Now there is PayPal, Apple Pay, Google Pay, and other virtual wallets that make it that much easier to spend.

The moment we walk outside we are on a battlefield where we need to lower our gaze or else we will be dragged into every Target in the city. Don’t get me started on the money-leeching temptation that delivery services have become. If I could have someone DoorDash me some toothpaste, then why should I not pay more for ease?

I give these examples to poke fun and also highlight that sometimes even the most frugal of us can fall prey to spending excessively. Consumerism is every bit about easing the process of purchasing things as it is about giving in to our human desire for comfort. The advertisements, endless food sales, brunches, and the like are not meant to exactly benefit the bank accounts. So don’t say I didn’t warn you!

With that said, we need to consider ourselves stewards of our wealth and learn to manage our wealth in line with Islamic principles. With a healthy budget in place, you know where your money is coming in and going out which brings about confidence and a sense of freedom. The hardest step is getting through the weeds of understanding our spending habits and then adjusting accordingly.

Here are some tips for creating a personal budget for starters:

1. Start with the right intention: Begin by setting your intention to manage your finances in a responsible and ethical manner

2. Determine your sources of income: Identify all of your sources of income, including your salary, any rental income, and any other sources of revenue.

3. List your expenses: Make a list of all of your expenses, including your monthly bills, groceries, and other regular expenses. Also include any occasional or irregular expenses, such as travel or gifts.

4. Prioritize your spending: Prioritize your spending according to Islamic principles, such as meeting your basic needs first and avoiding extravagance or wastefulness.

5. Set financial goals: Set financial goals for yourself, such as saving for Hajj or paying off debt. With these goals in mind, you will have a clearer vision and purpose for the money you make.

6. Track your spending: Keep track of your spending on a regular basis to ensure that you are sticking to your budget and meeting your financial goals. (See below for more info)

7. Give to charity: Make sure to allocate a portion of your income to charitable giving. We want to invest not just in the Dunya, but the Akhira.

8. Seek guidance: Consider seeking advice from a financial advisor who is knowledgeable about Islamic finance, or from a trusted member of your community who is experienced in managing finances. (hint: I am completely open to helping a sis out)

There are multiple applications that can help with tracking spending. Here is a list of some of these apps that you can check out: (Yes, I am doing a free promo for these apps… I’m considering it a Sadaqa🙂):

• Mint: This free app is available on both iOS and Android platforms and allows users to track their spending, create budgets, and receive alerts when they overspend or bills are due.

• Personal Capital: This app is designed to help users track and manage their investments, but it also includes a feature that allows users to track their spending and create budgets.

• YNAB (You Need a Budget): This budgeting app helps users track their spending, create budgets, and set financial goals. It is available on both iOS and Android platforms.

• PocketGuard: This app helps users track their spending, create budgets, and offers suggestions for saving money. It is available for both iOS and Android users.

• Wally: This app is designed to help users track their spending, create budgets, and set financial goals. It is available for both iOS and Android users

Overall, budgeting is an important practice in Islam because it helps individuals to manage their resources effectively, avoid extravagance and debt, and fulfill their responsibilities as stewards of wealth.