Managing family finances is a significant responsibility that requires good planning and execution. In this context, transparency is a key to ensuring that all family members can actively participate and understand their financial situation. Here are some important aspects of designing family finances with an emphasis on transparency.
1. The Importance of Transparency in Family Financial Management
Transparency in family financial management means that all family members know and understand their financial condition. This includes income, expenses, investments, debts, and assets. With transparency, every family member can feel a sense of responsibility and participate in financial decisions.
Justice in Fulfilling Trust:
In Surah An-Nisa (4:58), Allah ﷻ says,
۞ إِنَّ ٱللَّهَ يَأْمُرُكُمْ أَن تُؤَدُّوا۟ ٱلْأَمَٰنَٰتِ إِلَىٰٓ أَهْلِهَا وَإِذَا حَكَمْتُم بَيْنَ ٱلنَّاسِ أَن تَحْكُمُوا۟ بِٱلْعَدْلِ ۚ إِنَّ ٱللَّهَ نِعِمَّا
يَعِظُكُم بِهِۦٓ ۗ إِنَّ ٱللَّهَ كَانَ سَمِيعًۢا بَصِيرًا
“Indeed, Allah commands you to render trusts to whom they are due and when you judge between people to judge with justice. Excellent is that which Allah instructs you. Indeed, Allah is ever Hearing and Seeing.”
This verse reminds us to act justly and responsibly in fulfilling trust, including managing family finances.
Transparency in family financial management reflects the values of honesty, justice, and responsibility taught in the Qur’an. By applying these principles, we can manage family finances better, avoid conflicts, and achieve blessings in the sustenance provided by Allah.
Also Read: Islamic Crowdfunding-Based Property Financing: Concepts, Contracts, and Existing Examples
2. Transparency in Family Income and Expenses
One of the first steps in designing family finances is to disclose information about income and expenses. All sources of income, whether from salaries, businesses, or investments, should be explained in detail. Similarly, expenses, from daily necessities to unforeseen costs, should be clearly laid out.
In Islamic perspective, it is important to ensure that the income received is halal. Income that is unclear in origin or comes from unlawful activities should be avoided.
In Surah Al-Baqarah (2:168), Allah ﷻ says,
يَٰٓأَيُّهَا ٱلنَّاسُ كُلُوا۟ مِمَّا فِى ٱلْأَرْضِ حَلَٰلًا طَيِّبًا وَلَا تَتَّبِعُوا۟ خُطُوَٰتِ ٱلشَّيْطَٰنِ ۚ إِنَّهُۥ لَكُمْ عَدُوٌّ مُّبِينٌ
“O mankind, eat from whatever is on earth [that is] lawful and good and do not follow the footsteps of Satan. Indeed, he is to you a clear enemy.”
From this verse, it is clear that the head of the family and its members must ensure that what they consume is halal and also tayyib (pure). With transparent management, family members can monitor and ensure that the family income sources are halal and comply with Shariah.
3. Transparency in Family Budgeting
Creating a family budget is an important step in managing finances well. This budget should cover all financial aspects, from basic needs such as food, clothing, and housing, to education, health, and entertainment expenses.
Transparency in budgeting allows every family member to understand financial priorities and contribute to decision-making. For instance, determining how much should be allocated for savings, investments, or zakat. In Islam, financial management must consider principles of justice and balance, so the budget made must be fair and not burdensome to any party.
4. Transparency in Investing
Investing is a way to grow family wealth. However, investment also carries risks, so it is important to have transparency in every investment decision. All family members should know the types of investments made, potential profits, and possible risks.
From a Shariah perspective, investments must be made in halal sectors and free from riba (usury). Halal investments include sectors permitted in Islam, such as property, gold, or Shariah-compliant stocks. Transparency in investment also means involving all family members in investment decisions so that everyone understands and agrees with the decisions made.
5. Transparency in Zakat
Zakat is an obligation for every capable Muslim and is one of the pillars of Islam. Transparency in zakat means that all family members should know the amount of zakat issued and how to calculate it. The zakat given should come from halal sources and be properly allocated according to Shariah rules.
In addition to zakat, the family can also manage charity (sadaqah) and waqf transparently. Thus, every family member can understand the importance of giving and feel involved in the family’s charitable activities.
6. Transparency in Debt Matters
Debt is common in financial management, whether for urgent needs or investments. Transparency in debt matters means that all family members should know the amount of debt, to whom it is owed, and the repayment schedule. With transparency, the family can manage debt better and avoid conflicts due to ignorance or misunderstandings.
In Islam, debt should be undertaken with good intentions and within one’s means. Debt management should be fair and not burdensome, and efforts should be made to repay it as agreed.
7. Transparency in Risk Management
Risk management is an important part of family financial management. This includes steps to deal with potential adverse events such as job loss, illness, or disasters. Transparency in risk management means that all family members should know and understand the plans made to deal with these risks.
From an Islamic perspective, risk management also involves trusting Allah ﷻ after making the best efforts. Additionally, having Shariah-compliant insurance can be a way to manage risks in a halal manner. Shariah insurance with the tabarru’ (mutual help) system differs from conventional insurance as it does not involve riba and gharar (uncertainty).
Conclusion
Transparency is key in designing and managing family finances. With transparency, all family members can actively participate in decision-making, avoid conflicts, and ensure that financial management adheres to Shariah principles. Understanding and applying transparency in financial management will help families achieve financial stability and blessings in their sustenance.
References:
Alumni Sakinah Finance. (2022). Perencanaan Keuangan Syariah Untuk Semua. Tazkia Press
TafsirWeb. (2024). Surat An-Nisa Ayat 58. TafsirWeb. Retrieved from https://tafsirweb.com/1590-surat-an-nisa-ayat-58.html
TafsirWeb. (2024). Surat Al-Baqarah Ayat 168. TafsirWeb. Retrieved from https://tafsirweb.com/650-surat-al-baqarah-ayat-168.html