Spending Money With Principle 10-20-30-40 in Sharia Way

Managing finances is something that is difficult and easy. Why so? Because finance is a science that must be practiced, not just theory. It may seem easy in theory, but in practice, there are a lot of hurdles and obstacles to overcome.

Currently, there are many financial experts who share various tips on how to manage personal finances easily. And among these theories, there is such a thing as the principle of spending money with 10-20-30-40, or some call it the principle of 40-30-20-10.

The 10-20-30-40 principle is one of the easy ways to manage your personal finances, and is one of the most common ways to manage someone's income and cashflow every month.

This 10-20-30-40 figure is taken from the percentage of income that can be allocated to the needs of many people, or it can also be called a simple financial post. What are they? Let's discuss together!

10% For Social Activities

In this principle, 10% of your monthly income should be spent on social activities. Although, there are some experts who think this 10% is used for emergency fund savings.

As a Muslim, we are required to pay zakat maal of 2.5% of our total wealth every year. However, we should not be content with zakat maal alone.

There are many other sunnah worship that we can do with this 10%. We can give infaq, give alms, and waqf. All worship is not only about nominal, so don't be ashamed even if we donate just a little.

We can also give gifts to certain people we care about. Because by giving gifts, we can grow love for others, as the Prophet said: "Give gifts to each other, then you will love each other." (Narrated by Bukhari in the book Al Adabul Mufrod)

20% For Future

In managing finances, we must try as much as possible to manage our finances, so that later with this money we can meet various needs, both long term and short term.

In this principle, we must allocate 20% of our total income each month for long-term needs, such as setting up emergency funds, insurance, education funds, pension funds, and so on.

This 20% can also be allocated to certain savings, such as savings on buying a house, buying a car, or other expensive purposes.

To make all of the above goals easier to achieve, we need to invest our money in various instruments that suit our needs. You can buy gold, sharia shares, sharia mutual funds, or sharia P2P lending.

30% For Liability

In many financial discussions, it is stated that a person's finances are still considered healthy if he has debt/installment obligations of no more than 30% of his total income.

Therefore, in this principle, the figure of 30% is intended to pay various installment obligations, such as house installments or vehicle payments.

Or if you have accounts payable, it can also be included in this 30%. Be careful, don't let your finances get messy because it turns out that your installments are too much to exceed this 30%.

Don't worry, Islam also doesn't prohibit us from taking debt, as long as there is no element of usury or other unlawful things. So what if your debt doesn't reach 30%? Yes, of course it's better. That way you can allocate the rest for other needs.

40% For Living Needs

Well, the remaining 40% of your income can be allocated for various daily needs. Good for the cost of basic needs such as food, medical expenses, transportation, credit, clothing, or other needs.

This 40% also includes the cost of hobbies or lifestyle things, such as cable TV subscriptions, wifi, sports hobbies, recreation, and so on.

That is the principle of spending money according to sharia with 10-20-30-40. Easy isn't it? By using this principle, you can more easily manage your personal financial cash flow. You can also use this method for monthly financial check-ups, in order to make sure your finances are in good shape.

Good luck!