Islamic Family Budgeting

Elsha Sophia

, and Muhamad Nafik Hadi Ryandono

Magister of Islamic Economic Science, Airlangga University, Airlangga 4-6, Surabaya, Indonesia

Department of Islamic Economics, Airlangga University, Surabaya, Indonesia

Keywords: Family Budgeting, Islamic Consumption, Maqashid Shariah

Abstract: One of the wife’s roles is as a financial manager in the household. A wife is required to be able to organize

financial income and expenditure of families in a balanced way and the whole family's needs can be fulfilled

properly. Using the research library, this paper aims to become a reference for how to manage a household

budget in accordance with Islam. The focus of the Islamic family budget is to prioritize the fulfillment of the

needs of dharuriyyat, tahsiniyyat and hajiyyat for the preservation of the five elements of maqashid shariah

i.e. religion, life, mind, lineage and wealth, and to manage the spending and consumption according to

Islamic principles i.e. halal and thayyib, not being wasteful and extravaganct, and balancing between world

consumption and afterlife. By practicing Islamic religious teachings it can motivate the wife as a home

financial manager to manage household finances carefully, thriftily and prudently to create family welfare in

accordance with Islam.

1 INTRODUCTION

One of the wife’s roles is as a financial manager in

the household. A wife is required to be able to

organize financial income and expenditure of

families in a balanced way and the whole family's

needs can be fulfilled properly.

In Islam, a Muslim has three kinds of needs

according to ghazali (Sukadi, 2011), the need for Al-

Dharuriyyah which is a basic requirement for the

sake of preserving human life. Second, Al-Hajiyyah

i.e. the needs of pleasure or comfort and refinement

of Al-Dharuriyyah. Finally, At-Tahsiniyyah which is

the need for luxury and refinement of secondary

needs.

Humans do consumption in order to fulfill their

needs. According to Hidayat (2010), the purpose of

consumption in Islam is to realize the worldly and

ukhrawi maslahah. Worldly maslahah is fulfillment

of basic human needs such as food, beverages,

clothing, housing and health. Ukhrawi maslahah is

implementation of religious obligations such as

prayer and hajj. Means eating and drinking in order

to worship Allah SWT.

According to Al-Ghazali (Karim, 2007), welfare

(maslahah) of a people depends on the search and

the maintenance of the five basic purposes: religion

(din), life or soul (nafs), family or lineage (nasl),

property or wealth (maal), and highbrow or intellect

(‘aql). It focused on the appropriate claim that

revelation is "goodness of this world and the

hereafter (maslahat al-din wa al-dunya) is its main

purpose".

The Qur'an reminded humans not to drift and be

immersed in a materialistic and hedonistic life. It

does not mean that Islam prohibits humanity from

enjoying the life of the world. Allah SWT has given

everything to us, but Allah SWT also reminds us not

to spend too much and be excessive. Included in the

israf is human character who always wants to

exchange and replace the consumed tool, but the

function and quality of the old item is still good

(Hidayat, 2010).

Especially women or mothers play a role as a

financial controller in the household and have great

potential to behave consumptively in terms of

shopping for all household needs and personal

needs. They tend to have difficulty distinguishing

between what one needs and what one wants.

Therefore it is necessary for the wife to be efficient

in managing the family finances and consumption in

order to meet all the needs of the family. For that

Islam regulates how to set the family budget to be

balanced between expenditure and family income,

and also balanced between the needs of the world

and the hereafter. The authors want to discuss in this

Sophia, E. and Ryandono, M.

Islamic Family Budgeting.

DOI: 10.5220/0007537800810084

In Proceedings of the 2nd International Conference Postgraduate School (ICPS 2018), pages 81-84

ISBN: 978-989-758-348-3

paper how to set up a family budget according to the

perspective of Islam.

2 LITERATURE REVIEW

2.1 The Role of Women as Finance

Managers

In taking a financial decision it is often associated

with psychological problems. Mc's research (Kenna,

Karen and Linder in Ika, 2011), concerns the

relationship of psychological types with financial

decision making in that financial decision making

primarily determines household expenses, and

psychological factors often form the basis of a

foothold. As a result, the family financial

management is not based on the rules of financial

management in general, but based on the

psychological condition of the managers. These

psychological conditions include lifestyles, the

values adopted today, trust and character

(personality traits). According to some researchers,

one of them is Jung (in Ika, 2011) the whole

personality or 'psyche', composed of a number of

different but interacting systems. The most

important systems are the ego, the personal

unconscious and the complexes, the collective

unconscious and the arkhepus, persona, anima and

animus, and shadows. So, a woman who has the

responsibility as a financial manager must have

good personality traits, included in this is to set the

ego.

According to Kenyon and Borden (2004) in a

scientific article published by the University of

Arizona, finance management in a household must

include creating a budget, setting debt reduction

goals, setting saving goals, and developing a

spending plan. None of this is in any way contrary to

Islamic financial management principles or any of

the principles of financial management. Of course, it

is advisable that women who become good wives

manage full or part of household finances and carry

out these steps in the order of financial management

so as to minimize the occurrence of financial chaos

in the household.

2.2 Needs

According to Al-Syathibi, human needs consist of

three levels (Muflih, 2006), namely:

 Dharuriyat needs (primary).

Dharuriyat needs is a unity that can not be

separated. If ignored it will damage the order

of human life. Dharuriyat is a fundamental

basis for guaranteed human survival. The

scope of the dharuriyat needs includes five

kinds, namely matters relating to the

maintenance of religion, soul, mind, lineage

and wealth.

 Hajjiyat needs (secondary).

Hajjiyat needs is meant to complement the

needs of dharuriyat. Hajjiyat needs can be

fulfilled when the needs of dharuriyat are

fulfilled.

 Tahsiniyat needs (tertiary) or Kamaliyat

(complementary).

Tahsaniyat needs is the complement of the

pleasures of life. These needs can be met

when dharuriyat and hajjiyat have been

fulfilled properly.

In essence, it seeks to preserve the five maqashid

sharia to gain a comprehensive overview of sharia

goals.

Wants is a fulfilled requirement other than the

main need. Wants comes from human desires

demanding to be fulfilled and unlimited.

2.3 Consumption Behavior in an

Islamic Perspective

Consumption behavior in Islamic perspective

teaches about how to consume correctly according to

the teachings of Al-Qur'an and hadith so as to

provide clear instructions about consumption, so that

human consumption behavior becomes directed

(Hidayat, 2010). For humans in fulfilling their needs

in life and sometimes consumption behavior it is

also a habit in the fulfillment of one's wants.

Consumption behavior in accordance with Islam will

guarantee a fair human life and peace in the world

and the hereafter.

According to Muflih, (2006), consumption of a

Muslim consumer is not only for the material only,

but also the form of zakat and alms. For alms is

mentioned as many as 62 times in the Qur'an, which

is a very important sign in Islam because this

consumption expenditure will strengthen the social

joints of society.

2.4 Utilization of Property

According Hidayat (2010: 136-140) regarding

how to use the treasure there are 3 ways, namely:

 Not wasteful and not stingy. (QS.Al-Israa':26-

27)

 Should be careful and wise, and use common

sense in utilizing treasures.

ICPS 2018 - 2nd International Conference Postgraduate School

 Distributed through the instruments provided

for in Islam like the alms, infaq, grants,

sacrifice, zakat, wakaf. (Surah At-Tawbah:

41).

All the animate will definitely die. We do not

know when we will die. Death may pick us up at any

time. For that, a 1/3 of treasures that we have is for

when we give out charity as we prepare for kahirat

while a 1/3 of property is to meet our needs and a

1/3 of treasures is to prepare us that we need to

continue living (investment). While the 1/3 of

property we gave to charity will not be lost, even

exhausted by Allah SWT and will be doubled

starting 10 times even up to 700 times.

3 RESEARCH METHODOLOGY

The research methodology used in this study is the

descriptive qualitative method based on library

research. According to Zed (2004), library research

is a series of activities related to library data

collection methods, including reading, recording and

processing research material. It is a study that

utilizes the source library to obtain the research data.

4 RESULT AND DISCUSSION

4.1 Consumption in Islam

Hidayat (2010: 234) argues about some principles of

Islamic consumption including:

1. Halal and thayyib

Halal food will have an impact on one's faith,

because by consuming illicit food, surely he is a

friend of Satan. And Satan is the main enemy of

the human race. Halal and kosher foods should

also thayyib like the opinion of Mannan (1997)

that the food should be good and suitable to eat,

should be clean and useful because cleanliness is

part of the faith and clean food will also make

the body become healthy. So it can be consumed

as halal food and thayyib, meaning that besides

the food being halal, it must also be good for

human life, for example it is good for the health

of the body.

2. Not extravagant and excessive.

Islam orders not to overdo and waste in every act

including consuming Allah provision. Allah

reminds people not to spend too much and

excessively according to the word of Allah in the

letter of Al-An'aam verse 141.

3. Consumption Balance.

Consumption balance is an allocation of income

that should pay attention to consumption in

social activities such as zakat, infaq, and

shadaqah (Hidayat 2010: 239). In Islamic

economics every income is used to meet

consumption (C), ZIS (Zakat, Infaq, Shadaqah)

and saving (Nafik, 2009: 27). The mathematical

equation can be written as follows:

Y = C + ZIS + S

Y : Income ZIS : Zakat, Infaq, Shadaqah

C : Consumption S : Saving (Nafik, 2009).

4.2 Islamic Financial Management

Sunandar (in Inggriani, 2015) states that the

financial management of the Muslim family is very

important in helping to create a harmonious family

and able to support Islamic daily activities and daily

life. In fiqh, the family economy must be borne by

the husband. If the wife earns, then pengasilan can

be used for herself and if used to suffice the family

then the value is shadaqah. Good household

financial management always maintains a balance

(tawāzun) between the amount of family income and

the amount of expenditure. Islam teaches to always

be qonā'ah when family income is not so great and

trying to optimize spending posits well.

The expenditure items in a house according to

Imam al-Ghazali in sequence are ZIS (Zakat, Infaq,

Shadaqah), pay the debt, save, then the routine

shopping. Imam Ghazali puts household spending in

the last order because according to him the size of an

expenditure depends on personal habits and desires.

ZIS is dealing with the world and the afterlife and if

not accomplished will bring misery to the world and

the hereafter. So it is with the debt, so if the debt is

paid late then the person will pay a fine, interest, and

be terrorized by the debt collector. And if they die it

still leaves the debt that has not been resolved so it

will be the responsibility of his family or offspring

to pay it off; it will burden the heir or abandoned

family. But if not paid by the family or not blessed

by the lender it will cause losses in the afterlife.

Therefore the priority of allocation of household

expenditure according to Islamic shariah according

to Al-Ghazali consists of at least 4 main posts, that

is:

1. For zakat (minimum 2.5% should reach above

5%)

2. Debt expenditure (maximum 2.5%)

3. Savings/investments and protection/insurance

(minimum 20%)

Islamic Family Budgeting

4. Current needs allocation/monthly routine

expenditure (maximum 5%)

4.3 Women as Finance Managers in

Islam

According to 'Allal Al-Faisy in Nursidin (2012)

Maqashid syariah is the desired goal of the Shar'ah

and the secrets set by Allah on every law. While the

essence of maqashid syariah is to realize the good

and at the same time to avoid harm, or to benefit and

to reject harm, or in other words to achieve the

benefit, since the purpose of establishing the law in

Islam is to create benefits in order to preserve

Allah’s purposes.

As a muslimah who understands religion and has

a good religious insight, a servant should perform

the role of khalifah of Allah by keeping well the

trust given by Him. Maqashid syariah as the purpose

of achieving mutual benefit and must be applied in

family life. According to Sunandar in Inggriani

(2015), Muslim family financial management is very

important in helping to create a harmonious home

and being able to support the Islamic activities and

everyday Islamic living. One way of achieving

Maqashid Syariah for the sake of realizing mutual

prosperity is through family finance and the

managerial skills of the housewife.

Islamic family financial management based on

Islamic principles has a positive effect on the

achievement of maqashid syariah in the family.

Implementation in achieving maqashid syariah can

be seen from the fulfillment of education for the

child, control of household expenditure, having real

assets as investment form, the establishment of

harmonious life among family members, hygiene

and physical health of all family members, and

routine expenditure of zakat, infaq, shadaqah. The

wife in managing household finances should pay

attention to the five aspects of the maqashid syariah

in the form of preserving the religion, the soul, the

intellect, the heredity and the wealth. As a home

finance manager, the important aspect is to carefully

plan finance, organize the household cash well,

evaluating or actuating household cash for shopping

as needed and on the right way, and controlling

expenditure incurred by evaluating good religious

knowledge will support the achievement of

maqashid syariah and will be easy for financial

managers in implementing them according to

religious teachings. By practicing the religion in life,

it is believed that it would be easier to carry out

everything without any major obstacles. By

practicing religious teachings it motivates the wife

as a home financial manager to manage household

finances carefully, thriftily and prudently.

5 CONCLUSIONS

The focus of Islamic family budget is to prioritize

the fulfillment of the needs of dharuriyyat,

tahsiniyyat and hajiyyat for the preservation of the

five elements of maqashid shariah i.e. religion, life,

mind, lineage and wealth, and how to manage the

spending and consumption according to Islam i.e.

halal and thayyib, not being wasteful and

extravagant, and balancing between world

consumption and afterlife. By practicing Islamic

religious teachings it can motivate the wife as a

home financial manager to manage household

finances carefully, thriftily and prudently to create

family welfare in accordance with Islam.

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