Basic Islamic Family Financial Planning

The financial concept within a Muslim family follows the principle of separating property — each person keeps what is theirs — even after marriage. Although there is some concept of marital property and joint property, the view of such property is still tied to who earned how much of it. Understanding this therefore makes managing family life easier. The topics in this article include

• What must the man pay for in a Muslim family?
• What must the woman pay for in a Muslim family?
• How do a Muslim man and woman plan their finances together before marriage?
• Thai law, Islamic law, and prenuptial agreements
• Personal financial planning for Muslims
• Financial problems that actually occur in Muslim families in Thailand
• Conclusion: the importance of financial planning

What must the man pay for in a Muslim family?

At the start of family life after an Islamic marriage, once a Muslim man is ready to support himself and has enough financial standing to support a family, and has the intention to marry, he will propose to the woman and proceed with the marriage. The expenses that arise at this stage, which are the man’s main responsibility, are:

• Mahr — the property that the man must give to the woman, in an amount appropriate to the woman’s honor and standing
• Other gifts, such as rings, etc. (not required)

And once family life begins, the man is responsible for what is called nafaqah, which covers

• Consumer necessities — food, clothing, medicine — for the wife and children
• Housing (for the duration of the marriage), housing for raising children until they reach religious maturity
• Personal expenses for the wife and children

Notice that under Islamic principles, the man is responsible for 100% of household expenses

What must the woman pay for in a Muslim family?

The woman in a Muslim family has the duty of supporting the man so he can build a peaceful family and raise children to grow up strong, and to take care of the home so it is a place of peace and comfort. Under Islamic principles, in matters of family, the woman is not required to pay for anything at all. However, when it comes to finances, the woman may support the man in two ways

• Give freely — voluntarily helping with shared expenses that are the man’s responsibility, as a gift
• Lend — helping with shared expenses that are the man’s responsibility, as a loan

If the woman requests her rightful maintenance and the man is still unable to provide it, religiously the man immediately becomes indebted to the woman, and this debt continues to accumulate

How do a Muslim man and woman plan their finances together before marriage?

Given this financial structure, ARAYA recommends keeping finances 100% separate even after marriage, and starting by having the man pay a clear, specific amount of nafaqah (maintenance) to the woman, and avoiding joint ownership of property unless necessary. In the case of buying a home, if the woman is able to manage it herself, then she should manage it herself. The basic steps for family financial planning are

1. Determine the family expenses needed — consumer goods, housing, the wife’s personal expenses
2. Determine the amount of nafaqah the man is responsible for, based on that figure
3. If the man cannot pay it all, assess whether the woman will help by giving freely or lending
4. If the man handles the nafaqah, he should keep all the money he earns, except for the wife’s personal expenses, which must be given as agreed
5. The woman may manage the nafaqah as agreed
6. Other assets should be set as personal property — belonging separately to whichever spouse, husband or wife, earned them themselves, unrelated to the other
7. For buying a car or a house, make a clear agreement on ownership proportions, or it can be a loan — for example, the husband borrowing money from the wife to buy a car
8. For certain assets, such as a home used to raise the children, if the wife can hold sole ownership, it increases the woman’s security — for example, if the wife already owns a home, the husband can help by converting his installment payments into nafaqah, while the wife is fully responsible for the home’s installments herself; this is preferable and reduces problems at the time of divorce

Thai law, Islamic law in Thailand, and prenuptial agreements

The Civil and Commercial Code’s family provisions view marital property differently from Islamic principles. If you plan to follow Islamic principles in Thailand, but want issues to be resolvable under the Civil and Commercial Code when they arise, the important thing is that a prenuptial agreement must be made and attached to the marriage registration only. This approach helps you manage property according to Islamic principles while also being able to use Thai law to resolve family issues at the same time.

Personal financial planning for Muslims

Personal financial planning is important for Muslims, because effective money management also reflects the management of one’s various responsibilities in life according to Islamic principles. If a Muslim can provide for his wife and children, this is considered goodness, or barakah, under Islamic principles. And if a Muslim man and woman can have surplus assets enough to donate to society, that becomes an added good deed. At the same time, saving at least 3–12 months of expenses is also important for increasing a family’s financial stability. An example formula for financial planning for Muslims is

IN = B + EH + SI + ZS + U

• IN is Income, i.e. monthly or yearly income
• B is Basic Needs, such as food, consumer goods, clothing
• EH is Children’s Education and Health, i.e. children’s education costs and family medical expenses
• SI is Saving and Investment — savings and investments (for example, once you’ve saved one year’s worth of household expenses, you begin to invest)
• ZS is Zakat and Shadaqah — donations used for religious purposes and social development
• U is Urgent Need — general emergency spending arising from sudden wants

For example,
a family with an income of 3,000,000 baht per year, divided as follows

Problems that actually occur regarding Thai Muslim family finances

Even though Islamic principles clearly establish that the man is the sole provider for the family, in practice we find that in most families, the woman still has to help support the family, or even leads in supporting the family. In addition, the assets earned end up being managed in an unsystematic, mixed-together way, lacking planning, causing many Muslim families to face severe financial problems — living paycheck to paycheck, leading to family conflict. And when things break down, or divorce occurs, we find that Thailand still lacks a good divorce system, and due to the differences between Thai Civil and Commercial Code law and Thailand’s Islamic law, when divorce occurs it leads to severe conflict, and in most cases the woman ends up at a disadvantage. Therefore, developing knowledge on this subject is extremely important and urgent, so that families can have stability.

Conclusion: the importance of financial planning

A Muslim man’s duty to provide for his family requires an honest livelihood and stable income, so that he can support his family — this is a duty under Islamic principles. Financial planning is especially important for men, who clearly bear more responsibility than women in this regard. For women themselves, having knowledge of family financial planning and managing both personal and shared assets not only helps keep the home peaceful and stable, but also helps women secure themselves and their children in the event of divorce or the husband’s death. Therefore, do not neglect financial planning. ARAYA sincerely hopes that men and women will find happiness in married life along with a strong financial foundation. You can consult directly with ARAYA’s financial planners who apply Islamic principles.

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