It may be ironic, or even pushed by pure marketing and commerce, but spending tends to increase rapidly during Ramadan even though Muslims are told to keep expenses to bare minimum and fast. Ramadan is considered as an exceedingly generous and charitable month while also encouraging the importance of praying and spending time with family and friends.
It can be a way to lose track of your finances during this holy month as you head out to iftars, distribute food, and donate to charity. This can affect anyone’s short term or long term financial goals.
No matter what your beliefs are, it is always meaningful to change your habits, reflect on your financial situation and create a budget for Ramadan.
Do you know your sources of income?
The foremost tip to manage your finances, is to know your sources of income and keep checks on it. Apart from your monthly wage you may also be receiving other forms of income as a family. Some of you might have invested your money in areas delivering returns. The returns from your investments can be a significant part of your source of income. It is important to set aside a sum of money for special events such as Ramadan and Eid
Create a budget and stick to it
Even though Ramadan has already started, it’s never too late to make financial decisions by creating a budget for spending. Planning your expenses beforehand tends to be a better strategy to stop you from overspending. Start by making a list of things you are most likely to spend on throughout the month and allocate a specific amount of money for them while also considering daily expenses and necessities.
It is important to stick to your budget and not bulk buy or overspend during this month. There is a golden rule that states one should never go grocery shopping when they are hungry. While you are fasting, hunger can play an important role in tempting you to make bigger purchases. Research also says not to bulk buy for the whole month rather cut short the expenses.
Patience is a virtue
The current economic situation has impacted everyone especially the job markets leading to increasing uncertainty about your financial situation. Like fasting, it is important to be patient with your finances and decrease your daily expenditure by a realistic budget. You will see hope and large rewards in the short term, that will benefit you in the long term.
Utilise rewards and discounts
This holy month does come with its fair share of excitement as the markets flood with rewards and discounts. These offers are a good way of saving and sticking to your budget. You can utilise your reward cards and make the most out of the discounts being given at supermarkets, clothing stores and restaurants.
Most importantly, remember to give back when you can
Ramadan is all about charity and being humble. This month makes us realise how fortunate we are to have food on our table and a roof above our heads. It is necessary to make charitable contributions and help the poor and needy. The coronavirus pandemic has affected millions of families and being a force of good during these tough times is crucial.Most Muslims prefer giving Zakat in Ramadan because there are more rewards for doing so, but it is not necessary. Zakat benefits humanity and thus, by regularly paying it a Muslim performs his duty and discharged his obligation towards poor Muslims. Zakat being the backbone of the Islamic economic system, aims to improve the living standards of the poor and prevents the accumulation of wealth in a few hands.