While the holy month of Ramadan is associated with fasting, prayer, giving and connecting with family and friends, it is also associated with a significant increase in shopping and festivities.
The term "Ramadan Rush" was coined by the British media in 2011 and embraced by retailers worldwide. In a survey by Google in 2019, it is noted that 41% of people in the UAE increase spending during Ramadan.
Based on another survey by Souqalmal.com in 2016, more than 51 per cent of respondents admitted to spending more than usual during Ramadan, while 78 per cent said they exceeded their monthly budget during this period.
The Pandemic Impact
Since the advent of the Covid-19 pandemic, celebrations, festivities and shopping are largely subdued due to economic uncertainties, the fear of infection, and movement and gathering restrictions.
With the easing of rules, the pent up need for celebrations and more importantly, the discount galore, it is easy to get carried away and splurge on shopping and festivities this Ramadan.
However, it is crucial to be mindful of your spending, especially if you are running low on cash flow and savings. Here are some valuable tips that can help you manage your spending during this Ramadan;
Simple Tips For Budgeting, Shopping And Saving During Ramadan 2021
- Create a separate Ramadan spending and giving budget before you start your shopping.
- Classify your expenses into three buckets - Needs, Wants and Luxury
- Wants and luxuries are certainly tempting, do not give in to the temptation, prioritize needs and giving, and then spend on the desires and luxuries if your budget allows.
- Create a list of things you want to buy and stick to your list, do not engage in impulsive shopping.
- Avoid shopping for the whole month at one go. Buy for the first two weeks, assess your consumption and buy again for the next two weeks and Eid.
- Plan your purchases in advance; avoid last-minute shopping.
- Do not dip into your emergency savings.
- Use cash or your debit card; avoid borrowing as much as possible.
- If you have no choice but to spend on your credit card for things you need, prepare a payback plan before spending.
- Defer, delay or avoid large purchases like Furniture, White Goods, Cars or electronics unless it is a pressing need.
- Compare prices online and at least with two or more retailers when planning to make big purchases.
- Don't buy stuff just because it is on offer or discount.
- Also, only buy as much as you need or in moderation; there will be other offers in the future. Hoarding usually leads to wastage or excessiveness.
- Be creative with gifting on a budget. Use gift cards instead of actual gifts, allowing the receiver to decide what and when to buy.
- Likewise, if given a choice, accept a gift card.
- Now is the best time to use your credit card rewards points and/or gift vouchers, if you have them.
- Use an expense tracker app on your smartphone or even a simple pen and paper can also be effective.
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Sample Budget for a family of 4 - AED 10,000
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Sample Budget for a family of 4 - AED 5,000
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Needs - 50%
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(AED)
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Needs - 60%
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(AED)
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Food / Groceries
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3000
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Food / Groceries
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2500
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Charity / Giving
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1000
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Charity / Giving
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500
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Festive Spending
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1000
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Festive Spending
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500
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Wants - 25%
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Wants - 40%
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Clothing
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1500
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Clothing
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1000
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Gifts
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1000
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Gifts
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500
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Luxuries - 25%
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2500
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Luxuries - 0%
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0
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Summary
While festivals are meant to be celebrated, not being mindful of your spending can burden your finances for a considerable time.
Create a saving plan for the next Ramadan and set aside some money every month for guilt-free spending next year. Click here to know more about Ramadan to Ramadan Savings Challenge
Even small savings every month over the next 12 months can make a big difference to your budget next Ramadan.
Ramadan Kareem...
