When we got married my husband was a student. Every month, we had around $200 left after paying our rent and required health insurance payment. We were determined not to go into debt or interest but we also wanted to live well on what he was making as a Research Assistant. I desperately needed a budget to fit everything what was left over- $200 for everything else, from food to gas. So I came up with a budget that had stayed with us for almost two decades and helped us to live a debt and interest free life to this day alhamdulillah.
You want a budget that’s realistic and simple so you will actually use it. Let’s go through the following steps to create a simple, workable budget. You can use a piece of paper, a spreadsheet, or a budgeting software to create your own budget. I use a notebook for our budget in my home.
Start with your income-
Add up all your expected monthly income plus any side income. If you are paid at odd intervals, just get as close as you can get and add that amount. For uncertain amounts, choose a number that’s conservatively low. You can adjust the number later.
list your expenses-
Create a number of categories where you spend regularly and a special category for miscellaneous and occasional purchases.
If you’re doing it on paper, just use general categories. If you’re using software, you could create more categories as you need them.
Here are some general categories:
- Debt payoff – Paying off any kind of debt is the highest priority as a muslim. It will free up your income for future opportunities when you are not burdened with the monthly payments and interest.
- Sadaqah– Add what you spend regularly, for example, sponsoring an orphan every month.
- Home – Rent.
- Utilities – Monthly bills for water, electricity, gas, phone, internet, cable.
- Car – Car payments, gas, insurance, repairs, registration, inspection.
- Groceries- All food purchases and household supplies.
- Classes– The classes that you and your family members take regularly.
- School supplies
- Miscellaneous– One time big purchase, gifts, emergencies, travel expenses, Udhiya/Qurbani, one time sadaqah and dining outs etc.
I hope you can create your own budget now using these tips insha Allah. Don’t worry about how much you will be able to save, or if you will be able save anything at all etc. Turn off the negative tape, say bismillah and just do it.