I’m sorry for the delay…:(
Majlis Ugama Islam Singapura
31 May 2013 / 21 Rejab 1434
Preventing Ourselves From Being In Debt
Dear Friday Jemaah
Last week, we were encouraged to inculcate the habit of saving to help us manage our finances more effectively. This is to ensure that we will have enough funds for our future needs. And by doing so, we are actually upholding the Sunnah of Rasulullah s.a.w. Our beloved Prophet encouraged his ummah to plan for the long term.
Hopefully by doing as such, we will be able to bring ourselves closer to Allah s.w.t and succeed in achieving taqwa. Let us continue to try and heed all of Allah’s commandments and leave behind what He has prohibited upon us.
My dear brothers,
Rasulullah s.a.w. encouraged his followers to manage their finances wisely, and to avoid being in debt or taking loans. Allah s.w.t has placed much emphasis on this, as shown in the Quran where the longest verse in the Quran is about debt (loans), and Allah has reminded us that for every loan that is undertaken it has to be recorded and there must be witnesses present. [Surah Al-Baqarah verse 282].
In fact, there are also several hadiths which contain supplications or doa taught by the Prophet s.a.w., so as to seek refuge from the burden of debt. Among them, Rasulullah s.a.w. said:
Which means: “O Allah, I seek refuge with You, from sins and debts ”. [Sahih Bukhari]
The habit of taking loans or being in debt is very much discouraged in Islam. In fact, if a person were to die a syahid (martyr) without paying off his loans, his sins are not forgiven by Allah s.w.t. Rasulullah s.a.w. said:
Which means: “All the sins of a martyr in the Cause of Allah are forgiven, except his debts.” [Sahih Muslim]
As Muslims, we need to ensure that our spending does not exceed our income. In today’s uncertain economy, we need to ensure that we are not swept into the trend of excessive spending which then leads to a habit of being in debt.
Globalisation has somewhat given rise to the culture of materialism and consumerism, which indirectly leads to the trend of excessive and frivolous spending, without realising the different financial abilities. We need to avoid such a careless habit to prevent from excessive spending, so that we do not become wasteful, which is prohibited by Allah. Allah s.w.t. says in surah Al-Isra’ verse 26-27:
Which means: “…And do not spend wastefully. Indeed, the wasteful are brothers of the devils, and ever has Satan been to his Lord ungrateful.”
Remember, that the wealth that we are blessed with is an amanah from Allah s.w.t. It is our obligation to use the wealth, which Allah has given to us, for matters that are beneficial and towards causes that will help us gain Allah’s pleasures.
There are several practical steps that we can take to prevent ourselves from being in debt. Among others:
First, inculcate a healthy spending habit.
Settling payments for necessities such as our home loans and putting aside money for our savings should be our priority. As much as possible, we should prevent taking loans for unnecessary items. Remember, every new loan that we take is indirectly a multiplication than the actual cost of it. The bigger the loan, the bigger the monthly payments we need to settle.
We should also strive to pay off our current loans before taking on new ones. We should not delay in paying off our loans. If we have credit cards, we should not fall into the trap of being in debt, especially when we do not have enough cash flow to pay off the entire credit card bills on time.
Remember, when we take such unnecessary loans we end up having to pay interest, which is something that we should try to prevent. We should also avoid the habit of just paying off the minimum sum, but strive instead to settle as much as possible.
In fact, preventing ourselves from the habit of loans through our credit cards is one of the practical steps to reduce transactions that involve riba’, which is forbidden in Islam.
Second, make smart choices between ‘needs and wants’ before spending.
Especially for those who are married, it is very important to make wise distinctions between our needs and wants. Buying a house is a necessity, or a need, which should be made a priority.
However, renovating your home beyond what you can afford and thus having to take renovation loans is a want, not a need. Changing your furniture often, changing cars to a bigger and more expensive one are ‘wants’ and not ‘needs’. Furthermore, owning a car, eating out often, going on frequent vacations must be thought through and planned carefully, and decisions must be made within the framework of ‘wants’ and ‘needs’.
Clearly, we should be wise in identifying our priorities, or ‘awlawiyyat’, in managing our personal finances. We must strive to create a society that is prudent and wise in spending, and prevent from falling into the ugly habit of being in debt.
May Allah s.w.t. prevent us and protect us from the habit of being in debt, and may we become His servants who are always grateful for all the nikmat Allah has bestowed upon us. Amin, Ya Rabbal ‘Alamin.