Managing finances can seem overwhelming, especially for a young man just starting out in life. While it’s tempting to delay learning about personal finance until “later”, the sooner you build a good financial plan for your life, the more stable your future will be insha’Allah. Here are 8 tip as you begin building that financial plan:

Invest in your career

The single most important thing you can do for your financial security is to invest in your career. If you haven’t already, read our Muslim Man’s Guide to College series. Your prime financial goal when you’re in your late teens and early 20’s is to get yourself situated in a good, halal profession. You need a skill that gives you value in the market. If you’re not in a program that leads directly to a job (medicine, law, engineering), you need to build your marketable skills. Don’t do the minimum work for your first job out of college. Build your skills. Learn Excel. Sign up for a free online course on coding. Take on freelance assignments to build your work experience and expand your network.  In short, before you can figure out how to manage your money, you need to have a way to earn some.

Educate yourself

Start educating yourself about personal finance. This article is simply a starting point to get young Muslim men thinking about personal finance. Don’t consider it anywhere close to a comprehensive guide for your finances. I would recommend reading one book a year on the subject of personal finance. Some good books to start out with are:

  • I Will Teach You to be Rich by  Ramit Sethi
  • The Total Money Makeover by Dave Ramsey
  • Boglehead’s Guide to Investing
  • (For those in the medical field) The White Coat Investor by James Dahle.

In addition to these books, I would recommend the websites DebtFreeMuslims, RizqWise and the MuslimMoneyGuide.

Establish a budget.

You have to know where your money is going. It’s too easy to fall into the trap of spending way too much on discretionary items and then either not having enough money for necessary items or having too little money left over to properly plan for the long term. To make your budget, start by laying out your daily expenses like food costs, commuting costs, etc. Then list out your recurring monthly bills like rent, utility, phone bills, internet, etc. You might be shocked by how much money you are spending on “small” expenses like food. You can make a budget on paper, on Excel, or use an online service like

Build an Emergency Fund

You don’t want to be in a position where any unforeseen expense can land you into debt. Build an emergency fund that is equal to 6 months’ worth of expenses. Put away 10-15% of your paycheck until you get this emergency fund. Keep the emergency fund for emergencies. This isn’t a slush fund to dip into to pay for discretionary expenses. When you use up money in your emergency fund, make it a priority to refund it and get it back to its baseline as soon as possible.

Get rid of debt if you have any.

The Prophet ﷺ said “By the One in Whose hand is my soul, if a man were killed in battle for the sake of Allah, then brought back to life, then killed and brought back to life again, then killed, and he owed a debt, he would not enter Paradise until his debt was paid off.” (Sunan an-Nasai). You do not want to ever be in debt. And this is talking about halal debt, not riba debt! Read our college series before choosing a college. If you’re saddled with a lot of student debt, paying it off has to be a priority for you. If you’re a single bachelor, divert the absolutely maximum amount of money possible to paying off your debt. This might mean spending two years living off of beans and rice while working a side job as an Uber driver. Do it.

Get Health Insurance

Although it might not seem like it, health insurance is actually a very important part of personal finance. Exorbitant medical expenses is one of the biggest reasons people end up bankrupt. If you have a job that offers health insurance, look at the various options. If your job does not offer health insurance, look at your state’s insurance exchange and find an affordable plan.

Start saving for your retirement.

Yes, now, even if you’re in your early 20’s. Getting in the habit of saving money for retirement early sets the standard for you. Immediately siphoning a percentage of your paycheck into retirements savings gets you in the habit of forgetting the money even existed. If you saw only $100 a month from the age of 25 and get an 8% return, you’re looking at well over a quarter million dollars in your retirement account by the age of 65.

Start donating.

You will not get barakah in your money until you are spending a portion of your wealth on the poor and needy. This does not have to be a huge sum but it should be consistent. Hadith. You can start with something as small as a $10-$15 a month. With a few clicks of your mouse, you can set up a recurring donation to a charity organization that you trust.  The money will automatically come out of your account every month and you might even forget it’s being donated. What a way to fulfill the Sunnah of donating so secretly that your right hand does not know what your left is giving!

Any other financial tips or good financial resources that you know about? Share it with us in the comments section!

One Response

  1. Yusuf Ahmed

    Assalamualaikum bro, Thank you for the links for better financing. Will definitely check out.


Leave a Reply

%d bloggers like this: