Managing Monies in Ramadan
We often cannot control our spending during Ramadan due to the amounts needed for meals, preparation of Eid, gifts or souvenirs for relatives, new clothes, new shoes, accessories, home decorations, and so on so forth. The costs become greater when we live overseas or out of town and need to return to our hometown to celebrate Eid with our big family.
What causes us to be more wasteful during Ramadan? And how do we manage it?
First, self-evaluation is key and we must ask ourselves what causes us to be wasteful. Do we often buy more food from outside that mushroomed along the way during Ramadan for breakfast, or are we tempted by the many discount offers for clothes/bags/shoes before Eid? Eid gifts for our extended family also become extra expenses that must be included in our budget plan if we are going to enjoy a big feast with family back home.
Second, we must make a budget and list priorities. If we are used to recording our daily expenses we can set aside a budget for Ramadan and refer to the trends of the budgets in the past when determining specific spending for Ramadan. With the budget we have, spend only on things that we really need. I used to apply a traditional ‘envelopes management,’ especially when returning to my home country, i.e. saving cash into separate envelopes labelled of spending in order to be controlled. If you don’t like to use this method, you can also use debit card for your spending according to your budget plan for every item, and you must follow it. Examples are as follows:
- Zakat. Set aside a budget beforehand for charity and alms, especially if we usually spend zakat on an annual basis in Ramadan. Request for alms also typically increases during Ramadan. It is therefore a good idea to set aside a percentage of our alms as early as possible so that when we have to spend it, it will not be burdensome.
- Consumption. The cost of consumption in Ramadan should be equal to or smaller than those of other months. However, because we are often tempted by foods during the fasting month, we often buy food from outside in excessive amounts and at the end we do not have enough time to finish it at the time of breaking.
- Homecoming. For those of you who live in places far away from families, maybe Eid is the right time for silaturahim (friendship) with relatives. If you have enough money, immediately set aside funds for the cost of homecoming. Have this include the cost of tickets, lodging, meal, recreation, emergency funds, etc..
- Eid gifts. Many of us often give gifts or souvenirs to family and colleagues at the time of Eid. To avoid excessive gift giving, we should note first to whom we will give the presents, make a list, and after we have bought goods or gifts, then make a note for those gifts that have been fulfilled. It is necessary for avoiding leaving out any people who have not gotten Eid gifts while ensuring that there are not others who receive double gifts. Also, do not forget Ramadan bonuses for helpers/drivers/people who work for us, and giving to the needy which would be more meaningful.
- Emergency fund. This fund is required if there is something we do not expect, such as when one of our family gets ill.
- Discipline. This is the key element in managing finances. Set aside money in an envelope that is labelled, or use debit/credit cards to keep expenditures in accordance with the funds that have been budgeted. As much as possible, avoid shopping centers when our shopping rations are depleted, especially for those of us who are often tempted to buy luxury goods that may be delayed to another time.