financial planning in accordance with islam
Hafiz Muhammad Abid Noman
Visiting Lecturer, GCUF
Email: nomeyy87@yahoo.com
In Islam, financial planning involves managing money in a way that aligns with religious principles, ensuring earnings are used responsibly and ethically. Several key concepts guide financial decisions:
1: Halal Earnings:
Muslims are encouraged to earn through lawful (halal) means. This includes avoiding businesses related to alcohol, gambling, or other forbidden activities.یٰۤاَیُّهَا النَّاسُ كُلُوْا مِمَّا فِی الْاَرْضِ حَلٰلًا طَیِّبًا وَّ لَا تَتَّبِعُوْا خُطُوٰتِ الشَّیْطٰنِؕ-اِنَّهٗ لَكُمْ عَدُوٌّ مُّبِیْنٌO humanity! Eat from what is lawful and good on the earth and do not follow Satan’s footsteps. He is truly your sworn enemy.(Surah Baqrah: 168)
2: Zakat – Almsgiving:
Zakat is the obligation for financially able Muslims to give a portion of their wealth (usually 2.5%) to support the less fortunate. It serves to purify wealth and help those in need.اِنَّمَا الصَّدَقٰتُ لِلْفُقَرَآءِ وَ الْمَسٰكِیْنِ وَ الْعٰمِلِیْنَ عَلَیْهَا وَ الْمُؤَلَّفَةِ قُلُوْبُهُمْ وَ فِی الرِّقَابِ وَ الْغٰرِمِیْنَ وَ فِیْ سَبِیْلِ اللّٰهِ وَ ابْنِ السَّبِیْلِؕ-فَرِیْضَةً مِّنَ اللّٰهِؕ-وَ اللّٰهُ عَلِیْمٌ حَكِیْمٌThe alms are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarer; a duty imposed by Allah. Allah is Knower, Wise.(Surah At-Tawbah: 60)in this verse mention the categories of people eligible to receive Zakat.
3: Avoiding Interest (Riba):
Islam prohibits usury or charging interest on loans. Muslims are encouraged to avoid interestbased transactions and seek alternatives like profit-sharing or Islamic financing methods.اَلَّذِیْنَ یَاْكُلُوْنَ الرِّبٰوا لَا یَقُوْمُوْنَ اِلَّا كَمَا یَقُوْمُ الَّذِیْ یَتَخَبَّطُهُ الشَّیْطٰنُ مِنَ الْمَسِّؕ-ذٰلِكَ بِاَنَّهُمْ قَالُوْۤا اِنَّمَا الْبَیْعُ مِثْلُ الرِّبٰواۘ-وَ اَحَلَّ اللّٰهُ الْبَیْعَ وَ حَرَّمَ الرِّبٰواؕ-فَمَنْ جَآءَهٗ مَوْعِظَةٌ مِّنْ رَّبِّهٖ فَانْتَهٰى فَلَهٗ مَا سَلَفَؕ-وَ اَمْرُهٗۤ اِلَى اللّٰهِؕ-وَ مَنْ عَادَ فَاُولٰٓىٕكَ اَصْحٰبُ النَّارِۚ-هُمْ فِیْهَا خٰلِدُوْنَThose who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in interest or usury] – those are the companions of the Fire; they will abide eternally therein.
(Surah Al-Baqarah: 275)
4: Prudent Spending (Ihsan):
Islamic teachings emphasize moderate and responsible spending. Practicing moderation in expenses, avoiding extravagance, and being mindful of needs versus wants are essential.وَ اٰتِ ذَا الْقُرْبٰى حَقَّهٗ وَ الْمِسْكِیْنَ وَ ابْنَ السَّبِیْلِ وَ لَا تُبَذِّرْ تَبْذِیْرًا۔ اِنَّ الْمُبَذِّرِیْنَ كَانُوْۤا اِخْوَانَ الشَّیٰطِیْنِؕ-وَ كَانَ الشَّیْطٰنُ لِرَبِّهٖ كَفُوْرًا”And give the relative his right, and [also] the poor and the traveler, and do not spend wastefully. Indeed, the wasteful are brothers of the devils, and ever has Satan been to his Lord ungrateful.”(Surah Al-Isra 17:26-27)
5: Planning and Budgeting:
Creating a budget and financial plan is encouraged in Islam. It helps in managing expenses, saving for the future, and ensuring resources are used wisely.وَ ابْتَغِ فِیْمَاۤ اٰتٰىكَ اللّٰهُ الدَّارَ الْاٰخِرَةَ وَ لَا تَنْسَ نَصِیْبَكَ مِنَ الدُّنْیَا وَ اَحْسِنْ كَمَاۤ اَحْسَنَ اللّٰهُ اِلَیْكَ وَ لَا تَبْغِ الْفَسَادَ فِی الْاَرْضِؕ-اِنَّ اللّٰهَ لَا یُحِبُّ الْمُفْسِدِیْنَ”But seek, through that which Allah has given you, the home of the Hereafter; and [yet], do not forget your share of the world. And do good as Allah has done good to you. And desire not corruption in the land. Indeed, Allah does not like corrupters.”(Surah Al-Qasas 28:77)
6: Investing Responsibly:
Investing in permissible (halal) ventures and businesses is advised. Investments should comply with Islamic guidelines, avoiding industries like gambling, alcohol, or unethical practices۔