Financial Happiness: Islamic Finance Perspective

By Nethania Khalisa (Islamic Business 2018), Studies Division Staff of IBEC FEB UI 2019

What do you do when you woke up in the morning? What is the first thing that popped in your head the moment you wake up from your sleep? Many people will have this thought “I have to go to work so that I can get paid, then I can pay our monthly expenses, therefore I and my family will be happy” or some of you might think “I need to sell my products to earn profits so that I can live happily by being rich and wealthy”. This is the most common question and answers that every average worker asked and answered every day from Monday to Friday, every morning. After they have that mindset, they will automatically do their tasks like a programmed robot. They will get up, take a shower, have breakfast, go to work, work until night, go home, review their work tasks, and go to sleep. The cycle goes on and on again.

Now don’t get me wrong, I personally have nothing against this cycle, I think it’s a very productive cycle compared to what average teenagers do which is eat sleep play repeat. But the big question that needs to be asked to all the people living this life is: Are you financially happy with the way you live your life?

There are so many cases of unhappiness as a result of financial problems. We can take an example from around us, in Depok, West Java. The divorce rate in Depok is so high it hits 5.000 cases through 2017. “There are about 25 divorce papers filed every day.” as stated by the mayor of Depok city, Mohammad Idris, in November 2018. Among many reasons, economic and financial issue is the second leading cause of divorces. Head of Public Relations for Depok Religious Court (Pengadilan Agama), Dindin Syarief, stated that 75 percent of 2.673 divorce cases are filed by the woman’s side of the marriage, and most of them came from middle to upper class. It is suspected that the cause is the wife always feels the husband’s income level is lacking. This can lead to daily fight and bicker, or even disloyalty.

This is one of the reasons why not all financially stable people are happy. The unlimited, infinity desire and lust. A lot of people seek happiness in wealth, prestige, and social status. For instance, buying a big house, expensive car, watches from prestigious brands, etc. Therefore, they are willing to pay more to achieve these factors. And ways are taken to be able to pay for that. One of the ways is by paying on credit.

Let’s take Mr. X’s financial life as an example case. Mr. X’s salary is 25 million rupiahs per month. He spends 10 million for his house installment which he bought on credit, 7 million for his car which he also bought on credit, and his wife demands 5 million per month for her own spending and shopping. Now all he’s left with is 3 million rupiahs for his and his family necessities for a month. Do you think he’s financially happy with his salary that way?

In another case, Mr. Y’s salary is 7 million rupiahs per month. He spends 500 thousand to shadaqah, waqaf, etc, 1 million for his gold or stock investment, and his wife only demands 500 thousand rupiahs for her own spending and shopping. Now he’s left with million rupiahs for his and his family necessities, which is more than enough so he can save up some. Meanwhile he’s saving money to buy a house, currently still lives in his parent’s house, owns a standard motorbike, and doesn’t have a car. Same question, do you think he’s financially happy with his salary this way?

The comparison here shows us such a different lifestyle of two people. One of them, Mr. X has a bigger salary, yet bigger expenditure. The other one has a smaller salary, and also smaller expenditure (?). But we can conclude that Mr. Y is more prosperous than Mr. X. Why is that so?

First of all, Mr. X’s lifestyle is based on his excessive desire for mortal wealth. He could have bought a cheaper house and car, but instead, he chose to buy a luxurious one. This lifestyle is driven by the urge to gain social status and to be acknowledged by his surrounding. Meanwhile, Mr. Y has a saving-oriented lifestyle. Where he only spends his earnings on things that are or will be beneficial for him and his family, and then save the amount left after their necessities are fulfilled.

Secondly, Mr. X spent his money on things that are accounted for liability. Mr. X regularly paid for his house and his car. But then, at the end of the payment, their value would have depreciated. Also, these kinds of stuff have a high maintenance cost that causes him to spend on them even more. But in Mr. X’s case, he spent his money on assets. Such as gold, land, stock, etc. He allocates his money on them because then in the future their value would have increased. It will benefit him in the future even more. Then we can see that Mr. Y is investing his money in the biggest investment option that will always be a productive investment for a lifetime, which is Shadaqah, Waqaf, et cetera. His action isn’t based on profit-oriented mindset, but he emphasizes the well-being in the Muslims society, and he seeks for Ridha from his god, Allah.

This is the main reason why Mr. Y is more prosperous than Mr. X. Shadaqah, Waqaf, Zakah, and Infaq are the most guaranteed types of investment. It has been directly guaranteed by our creator, Allah.

“Who is he that will loan to Allah a beautiful loan which Allah will double unto his credit and multiply it many times?”

Surah Al-Baqarah verse 25 [2:25]

The verse stated above teaches us that by generously giving to the poor and needy, Allah will increase our wealth and blessings in this life, wipe out sin, and increase rewards. Shadaqah will also give barakah in our wealth. It is definitely the best investment for our dunya and akhirah.

It is also reported in Shahih Muslim that the Prophet Shallallahu ‘alaihi Wa Sallam said:

“Charity does not decrease the wealth and the servant who forgives, Allah adds to his respect; and the one who shows humility, Allah elevates him in the estimation (of the people).”


”There is not a day in which the obedient slaves rise in the morning except that two angels descend, and one of them says: ‘O Allaah! Compensate the one who spends.’ The other angel says: ‘O Allaah! Destroy the wealth of the one who is niggardly.”

However, the immerse gaining from shadaqah isn’t always in a physical and direct form in dunya. It doesn’t necessarily mean that by giving shadaqah,our salary would have doubled or our selling would have increased instantly. It may mean that Allah will put barakah into our life and wealth. We will notice that no matter how much amount of money we allocate in shadaqah, we will still have plenty left and our life will noticeably be happier.

Mr. Y is spending his money on necessity, which contains 3 levels. dharuriyah, hajjiyah, and tahsiniyyah. Dharuriyah is our primary needs, things that we cannot live without. Then there’s hajjiyah, our secondary needs, where if we can not obtain these things, we can still survive but we will not function well. The last one is tahsiniyyah, our tertiary human need. It is less important than ethics because the need is not about survival, it is to feel better.

Our society lifestyle is mostly based on desire, not needs. Let’s have a quick self-reflection. When we go to the mall with enough amount of money, then we see something that we like, what crosses our mind? “I want to buy that”. But do we think and consider “do I need to buy that?”. We need to start implementing our saving mindset and start spending our money on what will benefit us in the future.

The key to financial happiness doesn’t depend on the amount of income we earn in a period of time, it depends on how we utilize it. Our mindset defines our happiness and well-being. Buying stuff that is beneficial for us and our surrounding will gain our long-term happiness. To be financially happy we need to take the time to figure out what we really want and to not get distracted by all the bright and shiny or yummy and delicious things. So we need to set a priority list of what we really need. And also we should focus on where our money goes, the best way to allocate it is to make some investment out of it, especially investment for akhirah in a form of sadaqah, waqaf, and zakah.