It’s the 20th. You open your banking app and do the quiet arithmetic: ten days to go, not enough left to cover them. Nothing big happened this month. No emergency, no shopping spree. The money simply went.
If that sounds familiar, here is the uncomfortable part. In most months the problem is not the size of the income. It’s that nobody told the money where to go before it arrived. The rent had a plan. The phone bill had a plan. Everything else was left to the month, and the month spent it.
I’m an ACCA-qualified accountant, and I still sit down to do this every month. Below are the seven questions I ask. Answer them honestly on paper and you will have a plan that holds. Answer them in the free Money Plan and it does the arithmetic for you, in any currency.
1. Do you decide where your money goes before the month starts, or after?
Most people track. At the end of the month they look back and see where it all went. That’s useful, but it arrives too late to change anything. A plan works the other way round: before payday, every part of the income is given a job.
Try this: the day before your salary arrives, write your income at the top of a page. Then give each part a line (bills, giving, saving, debts, the things you enjoy) until income minus the plan comes to zero. Zero doesn’t mean spending everything. Saving is a job too.
2. What share of your income goes on things you can’t skip?
Add up your essentials: housing, electricity and water, groceries, transport, school fees, and any payment you have already committed to. Now divide that total by your income.
That one percentage tells you more than any budget rule. Take a household earning 25,000 a month whose essentials come to 17,100. That’s 68%. At that level, giving up a coffee or two won’t fix the month. The real work is on the two or three biggest costs, or on bringing more in.
Your turn: what’s your number? Work it out before you read on. Everything below depends on it.
3. Is your giving planned, or does it wait for whatever is left?
If giving waits for the end of the month, there is usually nothing left to give. So move it to the start. Put sadaqah, the help you send to family and the cause you support into the plan, beside the rent and the groceries. Decide the amount once and it happens every month without a fresh decision.
It doesn’t have to be large. The Prophet ﷺ said that the deeds most beloved to Allah, the Most High, are those done consistently, even if they are small (al-Bukhari and Muslim). In our example, 2.5% of income is 625 a month. Kept every month, that is worth more than a generous intention that never quite happens.
Zakat is a separate matter. It is worked out once a year on the wealth you hold, so treat it as its own calculation rather than a monthly line.
4. If your income stopped tomorrow, how many months could you last?
This is what an emergency fund answers. Measure it in months of essentials, not as a round number someone online suggested. With essentials of 17,100, six months is 102,600. If you have 20,000 saved, you are covered for 1.2 months.
That isn’t a reason to panic. It’s a starting point. Set a fixed top-up and let time do the rest: at 1,500 a month, our example household reaches six months in about four years and eight months. Slow, yes. Which is why the next question matters so much, because it stops the fund being drained by costs that were never emergencies. If six months feels too far away, make one month your first target.
Want just this number? The Emergency Fund Calculator works it out in your own currency.
5. Which “emergencies” do you already know are coming?
The car service. School books. Eid clothes. The yearly insurance bill. They arrive at roughly the same time every year, and they only feel sudden because nothing was put aside for them.
The answer is a sinking fund. Take the cost, divide it by the months until you need it, and set that amount aside every month. Say Umrah will cost 30,000 in twelve months and you have already saved 6,000. You need 2,000 a month. When the time comes you pay in full: no instalments, no extra charges, and you know exactly what it cost. This is the idea behind my book Fund It, Don’t Finance It.
6. Are you paying a little on every debt and finishing none?
Spreading any extra money across every debt feels fair. It is also slow, because nothing ever finishes. List what you owe with the balance left and the monthly payment. Keep paying the required amount on all of them, and put anything extra on the smallest. When it’s cleared, add its payment to the next one.
If one debt adds charges and the others don’t, clearing that one first can make more sense. Either way, one rule matters more than the order: no new debt while you are clearing the old. A car instalment with 36,000 left at 1,500 a month is gone in two years, and from then on that 1,500 belongs to your goals.
7. Is your plan built on money you have, or money you hope for?
Plenty of money plans look good because they count on things that haven’t happened yet: the bonus that might come, the return an investment might make. Plan with what you actually have. The Money Plan assumes no interest and no growth anywhere, so every timeline it shows comes only from what you set aside. It can look slower on paper, but it won’t let you down.
Then comes the part people forget. Once the essentials, giving, emergency fund, goals and debts are covered, what is left is yours. In our example that is 2,275 a month, about 525 a week. Eat out. Buy the gift. Spend it without guilt, because the important things are already paid for.
Allah, the Most High, describes His servants as those who, when they spend, are neither wasteful nor tight-fisted, but keep to a just balance between the two:
وَالَّذِينَ إِذَا أَنْفَقُوا لَمْ يُسْرِفُوا وَلَمْ يَقْتُرُوا وَكَانَ بَيْنَ ذَلِكَ قَوَامًا
Al-Furqan 25:67
Your turn: fifteen minutes this week
- Open the Money Plan and fill in the six steps with this month’s real figures.
- If it shows you are over your income, don’t close the page. Stretch a goal’s deadline, lower the emergency top-up for now, or look again at your largest essential.
- Tap Download my plan. Enter your email and the PDF downloads straight away, ready to print or keep on your phone.
- At the end of the month, put the PDF next to what actually happened. Adjust, and plan the next month.
Which of the seven questions was hardest to answer honestly? Tell me in the comments. If it’s the first, start with how to budget for beginners. If you want the full thinking behind spending less than you earn, Live Below Your Means covers it in plain steps.
Want to keep the plan going all year? The Money Plan Workbook turns these seven answers into a twelve-month spreadsheet for Excel and Google Sheets, with a tracker that compares your plan with what you actually spent, sinking funds, a debt clearance order and a net worth record.
The figures in this post are an example, not a recommendation. This is general guidance for education, not personal financial advice.
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