MANAGE YOUR BUDGET
Know the difference between a “need” and a “want”.
Track your daily expenses closely for four (4) to six (6) months until you
know your spending habits well enough to develop a realistic budget.
Periodically review your fixed and variable expenses; don’t assume fixed
expenses can’t be adjusted too.
Save five (5) to ten (10) percent of your net income every month. Pay
yourself first – don’t just save the leftovers.
MANAGE YOUR CREDIT
Pay your bills on time to maintain a good credit record. If you get into
difficulties contact your creditors and explain your situation.
Avoid using your credit cards unless you plan to pay the total amount due at
the end of the month (or if you are trying to build up a good credit
rating). STAY AWAY FROM PAYING INTEREST AND LATE PAYMENT FEES. With regard
to Interest which is a component of Riba, this is prohibited in Islam and
there are many verses in the Quran and ahadith which mention this.
Hazrat Jabir (ra) has reported that the Messenger of Allah (SAW) cursed the
devourer of usury, its payer, its scribe and its two witnesses. He also said
that they were equal (in sin).
MANAGE YOUR INVESTMENTS
Establish an emergency fund first, before you invest. Your emergency fund
should have the equivalent of three (3) to six (6) months’ income.
Work with someone you trust, and who understands your financial objectives.
Never invest in something you don’t understand.
Be a little sceptical. If it sounds too good to be true, it almost
Don’t put all your eggs in one basket. Work for a balanced investment plan
that permits your capital base to grow, and that can provide income when you
Once you’ve made investments pay attention to them. Ask questions, and stay
MANAGE YOUR RETIREMENT AND ESTATE PLANNING
Keep records in a system that others can understand and access. Should
something untoward happen to you, it will be easier to sort out your
affairs. Have someone you trust know where all financial and legal records
are, as well as the names of lawyers, accountants, and other advisers.
Ask your employer’s benefits administrator to explain all your employee
benefits so you can include information in your personal records. Make
maximum use of benefits when they are needed and decide whether you should
Periodically check the amounts accruing in pension plans, supplemental
Make a will and review it periodically. Couples should avoid mutual wills.
It is the duty of a Muslim who has anything to bequeath not to let two
nights pass without writing a Will about it. This is even more important
for us today as the laws of inheritance in the countries most of us live are
in contradiction to the Shari’a of Islam.
"Let there arise out of you a band of people inviting
to all that is good, enjoining what is right, and forbidding what is wrong:
They are the ones to attain felicity." (Holy Quran 3:104)