How can I get out of neverending debt? Alhumdulillah, its all riba-free loans of brothers but since i got married, my expenses have shot up. whenever i pay off a loan, a big expense comes up like car insurance or moving costs, etc and i have to borrow again.My Answer:
We all have a financial number (goal) in our minds that we fall back to or always build up to. Most of us choose this number unconsciously.
Examples...
Debt Riders: These are people who have their financial temperature set in a negative number. Even if they pay off their debts, they find a way to get back to their 'comfortable' negative number - be it negative 10 thousand, or negative 100 thousand in debt.
Break Eveners: These are the 'paycheque to paycheque' people. They only spend what they earn, and always find themselves around 'zero'. Their financial temperature is set to zero.
The Savers: These are the people that have a number they are aiming for - say like 10 thousand. They save up till that amount, then they buy something - bank account drops down - but then build back up to that number.
We all have a number in our mind that if we drop below or build higher, we always find a way to make money or lose money to get back to the number we feel comfortable with.
Activity: what is YOUR financial temperature set to? (Hint: it's probably the amount you have consistently found yourself in for the last 6 months or so)
If you are interested in resetting your temperature, click here to watch...
25 comments:
JazakAllah Khayr for this wonderful piece of advice. Found it really interesting AND practical as well.
Keep up the good work InshaAllah
Wassalaam,
AbdulAziz
Assalamu alaikum,
I would tell him four things:
1. Make these two du'as
http://www.makedua.com/display_dua.php?sectionid=38
2. Make lots of istighfaar
3. Give sadaqah, especially to relatives
4. Make sure you strengthen your blood relations. How is your mother since you got married? Are you sending her money like you did before?
Assalamu aleikum
I completely agree with the concept of money temperature and I think people should really discuss it when choosing a spouse as marrying someone with a different money temperature will definitely create issues in the marriage as each of the spouses will tend to pull the other to its comfort zone.
Salam
Mariam
Salaam dear Shaykh, interesting point....yes I have always maintained this buffer as I called it - it is also interesting how different people have different views on this....and i think it is influenced by your situation, if you come from a background with money you will set it at one rate, if you have no money then it will be different - not sure if there is a right or wrong answer for where the tempreature is set as it were...other than avoiding debt is the advise of our Prophet (saws)...AND it is better to be the hand that gives then the one that takes [i think this is the meaning of a hadith] ...so we should all be striving to create opportunities for ourselves and others rather than just being comfortable in our "jobs" or where we are...insha'Allah May Allah help us to help ourselves and others insha'Allah
@ ummmousamma very useful and practical advice Jazakillah.
@ Maria...I agree it is important to discuss this but dont agree that it will definitley cause problems if the temprature differs - BUT you have to be very realistic with yourself and any potential spouse re what you can and cannot live with...and I have seen Allah's Grace where He as opened doorways and granted provisions in such situations. I have also seen how the person who comes from a situation with less money can help ground the person who comes from a background with money - and they complement each other extrelemy well - Allah is the BEST of planners - it depends on the people and your intentions and Allah knows Best.
Asalamu Alaikum,
I would suggest the following:
1-Take most of the money you are earning and put it towards paying off your debt. It will hurt and you will feel restricted, but look forward to the liberating feeling of financial freedom. Being debt-free is such an amazing feeling and will significantly reduce even abolish worry and stress, so that you can worry and stress about good things :o)
2-Realize that it doesn't belong to us until we own it ourselves.
3-Don't buy something unless you have the cold cash for it.
Assalamu aleikum Reshmi
I think you can adjust to coming from different money backgroung if in your mind you have the same goal and the same idea of where you want to be. One of my sociology teachers one day said that" your social class is not determined by your assests but by the idea of belonging to a certain class" and that is what needs to be similar in a marriage.It is much important that the money itself
I will control What I have in my HANDS like bills , and other things like shopping and will try not to ask unless it is extreamly necessary, I will eat plain , live plain and dress plain and will follow my prophet sunna , I will get rewards from Allah inshallah and My Dear allah will open new doors for me.
When I have money I will pay it back at once.
I will leave The Name of Allah For me and my family.
easy, dont get married till u become a millionaire and also have guarantee that your will be like that for life..
Salaam Alaikum
Personally, I am a Break Evener *sad face* The whole "money burning a whole in my pocket" cliche'. Alhamdulillah, this class has really changed my thought process on this issue.
Mabrook to the Brother and his Wife. Possibly, they could rent a room from a family member until they get into a better place financially.
Personal story - right after I got married, my poor husband was laid off from his job. It was not the ideal way to start off a marriage. But, Subhana Allah, 6 years later.. we have a very strong bond and my respect and love for him grows deeper every day. He is an amazing man.. First, we both credit Allah SWT for what we have and second my husband and I are constantly thanking Allah SWT for all he has given to us.
p.s. I also believe that the power of dua is soooo strong. So, we should all keep this Brother and his Family in our duas..
Assalamu alaykum wa rahmatullahi wa barakatu,
I think we should all strive to live according to our means and earnings and not beyond that. If i don't have the money i don't buy it, and If i don't need it i should then prioritize. It is very easy to get distracted in this world of "materialistic gratification". InshaAllah, Allah (swt) help all of us to stay out of debt. Amin.
Asalamailaikum,
I think that there are several individuals who are well educated but financially illiterate, not trying to offend anyone. Many people are stuck in the proverbial cycle of getting a good job a nice house a car begin a family and then "settle". What happens is that people make money and they focus on what bills they have to pay and live according to that, so the rent or house pymt, car pymt, cable etc. At the end of the day the important thing is looking at how much one is able to retain after paying everything off and finding ways to grow that money rather than just leaving it with a bank.
Another thing is to clearly distinguish what a asset is and what a liability is. Many are under the notion that a house is an asset it is not it is a liability b/c you have to pay monthly for it and if you don't... a asset is something that puts money back into your books, so renting a property out can be an asset provided it continuously puts money back into your books.
I hope that helps,
W'salam
Dua is a definite.
According to my research more than 30% of "after tax" income in the United States (and possibly Western Europe) goes toward interest payment of one form or the other. I have developed a couple of models to help Muslims and others get out of the debt trap. Check this out:
http://trulyinterestfree.com/expansion-of-zakah.pdf
http://trulyinterestfree.com/IBF-Interest_Free_Student_Loans.pdf
I would love your feedback if the models make sense in practice.
Assalaamu 'alaykum ~ I clicked to watch and, while a new window appeared, nothing played. Any suggestions?
Also, everyone has made good points, mashaAllah and thank you. I'd add (hope not repeating what the shaykh said) that it's clear he has no savings with which to address the regular stuff of living. That being the case, he needs to bump up his savings - not for a specific number, but as a specific percentage of the gross as an act of self care and respect...basically paying himself first. Next, he and his wife need to sit down and look forward over the next year and see if there are any known biggies coming down the pike. If so, a plan needs to be in place along with an agreement for how they plan to prepare for it, whether it be to save more and/or increase household income.
It also sounds like the monthly payments on the riba-free loans from brothers actually need to be reduced to faciliate attending his household in the first place, but again, this takes communication with those involved in and affected by his financial affairs.
Also, really enlist the help of his wife. In America, women control 80% of the household purchases - whether she's buying name brand everything makes a huge difference. This is where her economizing skills can really help, alongside any income she is bringing in as well, if applicable.
@Liaquat Ali
Masha Allah - awesome website and articles. Are you also taking the Millionare class?
If okay with yourself and Sh Al Shareef - I would like to share your website with Muslims and my Non-Muslim family. This is excellent information.
Jazakallahu Khair
SubhaanAllah! Liaquat, I've read your articles. IFL (even the name!) is what I have in my business notes and have discussed with my friends & lifecoach for some time. I would like to, then, support you however I can in what you are already putting out there. I am a guest writer for Muslimah Source (on finance/personal development) and have two blogs (muslim-fp.blogspot.com and muslimahmoneymatters.wordpress.com). I'd be happy to use those channels (plus my twitter acct) to help get the word out about your effort.
As Salamu alaikum WR. WB. I would ask to that brother to do lots of "ISTIGFAR", guard all of the obligatory ibadah, take care kin and kieth, make habit of doing lots of Daurud shareef, diker of Allah. I would also suggest to force yourself to wake up for "Tahajjud prayer" and make lots of Dua in sujud to Allah swt the ever generaous. Guard yourself from commiting sin. Mistake will happen, If it so do not delay to repent and do tawba. "Cut your coat according to your cloth." Live simply plain life until you pay off the debt. Do not allow anybody to convince you to spent for some thing which you do not need it. Before you buy any thing, ask yourself if you need it or not. you will get answere always negetive. Any other muslim BR/Sis you know in a same condition like you, make lots of dua for him/her, angel will say Ameen to it.(according to sahih hadith) May Allah swt protect the brother and all muslim from debt.
@Aisha
Salaams. Yes I am taking the Millionaire class.
Sh Al Shareef has not commented on my models yet. So it is up to you if you want to share them now or wait for his feedback.
Thanks for your kind words though.
@Hibah
Thanks for your kind words sister.
I will make a few suggestions to the brother. First understand that what you have is from Allah. Allah tells us not to exceed the limits he has set for us and that is in all things. So take stock of your life and see if there is anything you can do without. Also give sadaqa as often and as much as you can. This doesn't have to always be in the form of money. Because what you have is really what you give away. I live a VERY modest life. This is what Allah has given me. I am just able to make ends meet. But I have found that EVERY time I give in HIs cause for HIM and HIM alone, He increases me in wealth and then I give even more. Month to month bills will be there. Insh'Allah ask those you have borrowed from if they will forgive your debt as it will be better for them and strive to refrain from the constant borrowing. Make du'a to Allah to make a way for you not to live debt free. Insh'Allah I will make du'a for you as well.
I disagree with the debt forgiveness suggestion. Debt restructuring is suggested first in 2:280. Also, the command for restructuring is addressed to the lender and not the borrower. Debt forgiveness should be the last resort.
This brother seems to be a young Muslims. He needs to increase his cash flow by increasing his thermostat level. That's all.
Asalamu 'alykum warahmatullah,
Dear Br. AbdulAziz, here's another practical way of understanding your finances and taking the steps in over-coming them inshAllah:
1) Get a pen and paper (or use Microsoft Excel Spreadsheet software <-this is best as it's easier to save and make changes to it) and make a list of ALL your MONTHLY Income and Expenditure. Like this:
MONTHLY INCOME
INCOME | AMOUNT | DESCRIPTION
Wages | £1000 | £250 x 4 weeks
etc..
TOTAL INCOME:[make sure you have listed ALL your regular income(s)then add them up]
Then...
MONTHLY EXPENDITURE
EXPENSES | AMOUNT | DESCRIPTION
Rent | £600 | £150 x 4 weeks
etc...
TOTAL EXPENDITURE: [again, make sure you have listed ALL your regular bills inc. food then add them up)
Lastly...
BALANCE: (that's TOTAL INCOME subtract TOTAL EXPENDITURE)
If you have a positive balance then alhamdulillah you have a healthy cashflow.
However if you have a negative balance (your in the minus) then look at your list of Expenses and see where your spending money where there no need or can make a cut-down on-that's all Expenses that YOU have CONTROL over like food for the house, shopping for clothes and goods, etc.
Also Expenses that YOU have FLEXIBILITY in CHANGING to a lower amount (e.g. if your car insurance is too high try selling it and changing it for a car with considerable lower insurance <- e.g. from a 2005 plate car to a 1995-1998 plate car) or even REMOVING from the list <- e.g. write the reason(s) WHY you NEED the car (what you use it for). If it's just getting from A to B then perhaps you don't need the car and can use the bus/train instead.
Once you sort out your BALANCE by making it POSITIVE inshAllah THEN you can start working on paying back your loans.
Make sure you include your wife if she contributes in the MONTHLY Income and Expenditure of your household!
Wa barakAllahu lakum wa barakAllahu 'alykum wa jama'a baynakuma fi khair! :)
Fi aman Allah inshAllah,
Sister D.
Assalaamu Allaykum Wr WB Shaykh, It's an interesting point and very important to discuss,everyone has made a good point masha ALLAH @ UmmoUssama, @ Nurun I completely agree with you sisters it's very useful and practical advice. Jazakilaahu khayran. And also I want to add sister hibah's last point, sence womens control more of the household purchases, I would advice the brother, the help of his wife, Insha ALLAH, may ALLAH help you, Wasalamu Alaykum Wr Wb.
Fi Amman Allah,
Ayaan
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