11 tips to rein in your spending this Ramadan

Ramadan can see your spending spiral out of control, but a little discipline and some clever advance planning can keep your finances on track during the holy month

As we saw last year, the pandemic can intensify what is already a challenging month in many ways. With restaurants and shops permitted to stay open this Ramadan, it can be tempting to create a sense of normalcy by spending on lavish iftar buffets and expensive gifts. Budgets can go haywire in a normal Ramadan, but the psychological effects of living – and fasting – through a pandemic can easily see expenses spiral out of control.

But rather than blow a hole in your budget this month, why not focus on the essence of the holy month instead?

Simplicity goes hand in hand with spirituality in Ramadan. Remembering that key tenet can help you keep your budget in check, while empathizing with those who are less fortunate. Here are some approaches to consider.

Create a Ramadan spending plan. Ramadan is marked in special ways, so it’s important to realize that your regular monthly budget may not necessarily apply to the holy month. Instead, create an itemized list that incorporates groceries, clothes, gifts, and entertainment such as streaming services, and then set aside a weekly budget for these items. Include every member of your household to arrive at a realistic idea of the amount you will need to set aside.

Add 15 per cent to your budget. Last-minute purchases are unavoidable at the best of times, so why should Ramadan be any different? But when you plan for these expenses in advance, you don’t have to draw on your savings or borrow money to pay for them. So, set aside an additional 15 per cent of the Ramadan fund for this reason.

Use a little psychology. Tell your family that any unscheduled purchases will come out of this 15-per-cent fund – but that if they manage to make it to the end of the month without dipping into it, the entire amount will be donated to an Islamic charity of their choice in their names. At the very least, everyone will think twice before splurging.

Make a shopping list: Once you’ve planned all your purchases, write out a shopping list and stick to it. Buy your groceries in small amounts on a weekly basis, instead of buying kilos of food in advance. In the age of 24/7 supermarkets, you can always order something if you run out – and as a bonus, you won’t be left with unused pantry staples for months afterwards.

Shop online – in non-fasting hours. Take the psychology one step further and shop online for groceries and iftar meals in advance – and preferably in non-fasting hours. We usually spend more when we’re hungry, especially on food. Not only do you avoid over-ordering – and with it, wastage – but planning an iftar delivery the previous day can also build a delicious sense of anticipation.

Limit restaurant iftars. Everyone loves a good iftar buffet, but there’s no call to eat out every night. The past year has forced us all to learn about cooking, so why not put that knowledge to good use by getting each member of the household to cook a different dish each day? Besides saving money on expensive iftars, you’ll also create priceless family memories.

Don’t break your fast at a mall. When you do plan to break your fast at a restaurant – in line with COVID-19 regulations, of course, plan to do so at small, independent restaurants outside shopping malls. Simply going for a walk through the mall to digest your iftar can tempt you into making unbudgeted expenses. Besides, supporting small restaurants will help them along their recovery at a difficult period, which can only generate goodwill.

Only keep small amounts of cash in your wallet. Ramadan is a month of generosity, but that doesn’t mean you need to hand out large cash amounts to everyone at all times. A small additional amount, if you’re so inclined, can achieve the same objectives. And if you’d like to make people’s lives better, give a predetermined amount to charity in line with your religious obligations instead.

Look out for discounts. In the UAE, Ramadan can be a great time for rebates and spending rewards. Look for bank and credit card offers, browse through Facebook groups, and check whether delivery services are offering one-off meal orders. Simply switching to a new delivery app for a single purchase may save you money. But remember to only spend on things you need – a new car for the sake of it shouldn’t be one of them.

Track your spending every day. Accountability can keep those finances on track. So, make it a point to check on a daily basis if your spending is in line with your pre-determined budget. Don’t beat yourself up if you’ve gone over budget (remember, you’ve accounted for it!), but resolve instead to stick to your plan the next day.

What’s the emotional payoff? The pandemic has taught us all to value simplicity and emotional connections over material possessions. Before making a purchase, ask yourself why you’re doing so. Do you really need the item? Does your friend need another perfume? Consider what emotional or physical states are influencing your purchases and use the moment to think about how you can generate a positive emotion by doing something good instead, in keeping with the Ramadan spirit. Instead of that bank-breaking big-brand perfume, why not give to charity in your friend’s name instead? It’ll cost you less and earn you brownie points.

Ramadan is a season to focus on what truly matters, and to empathize with those who are less fortunate through abstinence and prayer. With a little planning, you can achieve those very objectives with the added bonus of keeping your finances in check.

Found something helpful? Consider paying it forward by sharing these tips with your friends and family, or on social media.

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Keith J Fernandez is an editor and communications professional who advises on marketing content strategy. He is based between the UAE, the Netherlands and India and writes about business, technology and personal finance.

This article is intended to provide general information about finance and investments and does not replace or should be taken as professional financial advice. The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article except information on Citibank N.A. – UAE products referenced herein.
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