How to Plan a Household Budget

Human life consists of needs, facilities and luxuries. All these things are not for free of charge. We have to spend money on them. Four types of people are usually found in our society.

1                  Those who earn good money and spend lavishly (Such people may face financial problems later in their life.).

2                  Those who earn good money, but spend wisely

3                  Those who earn little and spend wisely

4                  Those who earn little, but spend lavishly

These types of people are usually the salaried ones who remain worried financially. It also affects their domestic life and husband and wife start quarrelling.

Why is it necessary to plan a household budget?

You might have heard the sentences such as ‘unable to survive,’ ‘Income is not sufficient,’ ‘Nowadays, we are on a tight budget.’ Undoubtedly, a few helpless people have such a low income that however they reduce their expenses, they are unable to fulfil even the basic needs of their lives. May Allah عَزَّوَجَلَّ improve their conditions! However, there are also a few people who know how to earn, but do not know how to spend. Remember, it is better to think before you spend than to worry after you spend. Therefore, if we make a household budget to maintain a balance between income and expenses, we will be able to save ourselves from many worries.

Precautions of planning household budget

Must take care of a few things before planning a budget.

٭ Avoid spending more money than is necessary

٭ Do not make unnecessary expenses a part of your household budget.

٭ Do not spend on the things that lead to sins. For example, tickets of cinema halls, expensive sound system, LCD for watching movies and listening to songs, etc.

٭ Deposit all the money to one person (in the family). The same person should pay for expenses and the same person should have a written record of income and expenses.

٭ Do not spend more money on a particular task than what you have planned in the budget.

٭ Save up wherever possible. The more you save, the less you worry.

Method of planning household budget

Divide your monthly household budget into ten parts. (Everyone can decrease or increase it according to their lifestyle).

1. Ration

It contains flour, rice, ghee, cooking oil, sugar, tea, pulses, vegetables, fruit, meat, salt, spices, milk, etc.

2. Cleaning

It contains the items that are used for cleaning home, clothing, body, and crockery, such as soap, surf, shampoo, toothpaste, Miswak, phenyl.

3. Utility bills

For example, electricity, gas, water, cable, internet, phone bills, etc.

4. Rent

Such as the rent of the house, bus, taxi or rickshaw fare for going to the office or visiting someone else; if someone has their own bike or car, then the cost of its fuel, etc.

5. Treatment

In case of illness, doctors’ fees and medical expenses, etc.

6. Education

School/college fees, school van charges, expenses of books, copies, and stationery, pocket money of children, and daily school lunch expense.

7. Repair or exchange of household items

Spending money on repairing items such as fridge, washing machine, gas stoves, etc. or buying new items if the old ones are unusable.

8. Spending in the way of Allah عَزَّوَجَلَّ

Helping the needy, giving food to someone who is hungry or poor, or donating [money] to Masjid or Madrasah, etc.

9. Unexpected expenses

For example, guests suddenly arrive or you have to attend a wedding or you lose something, your mobile phone or bike etc. is snatched or stolen.

10. Long-term expenses

Saving the money left after meeting expenses if somebody intends to buy an item such as fridge, washing machine, furniture, bike, or a piece of land in future.

How much to spend on which thing?

For this, there is a suggestion that calculate, first of all, how much you usually spend on the above-mentioned things in your house and what are the things from which you can save money. Calculate your monthly expense according to it. Then plan your household budget as per the following assumed household budget. (If you want, you can write the actual amount in place of the amount in percentage. For example, if your utility bills expense is 10,000, write the same amount in the table).

Table of Household Budget

May AllahMay  Allahعَزَّوَجَلَّ make things easy and comfortable for us!