Personal Finances

Personal Finances - Sheikh Joe Bradford

Introduction and Setting Goals

How many of you are in high school? Middle school? Elementary school? You're in high school? Okay. College? What year? How many freshmen are moving in? How many sophomores? How many juniors? How many seniors? How many people are wishing they could go back to college? Today I wanted to come and talk to you about a few points that I think are pertinent for each and every one of us to understand. Whether we're getting ready to go to college or whether we're in college.

And they apply to us in our professional lives as well. Number one, have a goal. The Prophet ﷺ said, Islam succeeds and it is not succeeded. Islam succeeds and it is not succeeded. Which means every single thing that you do in your life as a Muslim, you should have a goal for. You should have an idea of why you're doing it.

Educational Purpose and Parental Guidance

So if you're in college right now and you're taking classes and you don't really know why you're taking them. And some of them seem like they're fun and some of them seem like they're not so fun. And you don't really know what you're doing.

You need to spend some time with yourself. Re-evaluate your goals in life. Understand why you're in college, what you're studying and what you're doing. Now, a dilemma with many Muslim kids, many Muslim families. Maybe the major that you're in is not necessarily the major that you wanted to major in. Maybe it's the major that your parents wanted you to major in.

Okay? And what you're going to have to do is you're going to have to think about it and humble yourself. And understand that even though your parents might have been forcing you into one or two specific majors. That doesn't mean that they don't want good for you. What it means is that they want you to be successful. So if you want to be successful in something else other than what your parents have set out for you. You need to know about that goal and be able to exhibit it to them clearly.

And tell them, this is what I'm doing and why. And this is what I'll be able to do in the future with it.

Career Choice and Values Alignment

Number two, choose your career wisely. One of your main goals, have a goal. In order to succeed is to choose your career wisely. You don't want to end up doing something that number one, you'll be out of a job from in several years. Number two, that you will not be comfortable with in a few years. Yeah, that finance degree might seem really great right now with a six-figure salary. But when you're dealing with derivatives and other things that are detrimental to the economy. They might not seem like the best job

to have at that time. You might want something that speaks a little bit more to your own values. So try to align your values with your career choices.

Find out alternatives and things that you can do while you're in college for making sure that you get through college. Know that your goal is the number one to do what while you're in college? Your number one goal is what? To graduate, thank you. So many people start college, they don't graduate. So many people graduate not knowing what they're doing in their lives. So while you're in college, your college goal is to graduate. But your life goal is something else.

Goal Setting and Planning

So you need to have a goal for while you're in school. A goal for after school. And you need to have a lifetime goal as well. And it might seem silly. But you need to write those down. Write a list of your goals.

And say, the Prophet ﷺ said, Islam succeeds, it has not succeeded. I will be a success as a Muslim. While I'm in college, after college, and in my life. If that means that working while you're in college is something that you need to do, then you'll need to do it. And we'll actually talk about that in a minute.

The most important thing that you can do, however, is to take your education personally. Understand that it is serious. And understand that what you do now, if you're not in college, in high school, will affect what you do in college. What you do in college will affect what you do for the rest of your life. So make those decisions wisely.

The Dangers of Credit Card Debt

There are no free t-shirts in life. There are no free frisbees in life. Hey man, you want a free frisbee? Yeah, sure. Okay, sign this thing right here. Do not sign your life over to a credit card company when you're in college. How many of you have gotten credit card offers? Almost half the room. Did you ask for them? The credit card genie just gives everybody our addresses.

The worst thing that you can do right now while you're in college is get bogged down with credit card debt. It's easy. And the reason why it's easy is because, number one, you're not paying for it out of your pocket. And number two, you don't think about your bill until you get it. And then if you get your bill and you don't want to think about it, you pay the minimum and you let it snowball. And what eventually happens is you have thousands and thousands and thousands of dollars of debt.

I have friends who now have been working professionally for 15 to 20 years. And they told me I have five credit cards. I use the first to pay off the second to pay off the third to pay off the fourth to pay off the fifth. And then the fifth is what I use for repairs on my rentals that help to pay the first bill.

Building Credit Responsibly

So do not get sucked into the credit card trap. Now, it's important to note that it's going to be important for you to build your credit. So what you want to do is if you can convince your parents, get them to transfer one of your utility bills into your name. The water bill, the light bill, something like that small. Get your name on a bill that you're paying consistently. Or get one of those credit cards and then give it to the person you trust the most, whether it's your mom or your dad or whatever.

And say, here, keep this for me. Use it for a purchase, per se, from Amazon. Buy a book, immediately pay it off. Because unfortunately, if you don't have a credit score when you get out of college, it's going to be that much more difficult for you to get a car, an apartment, and things like that.

Prophetic Warning Against Debt

The Prophet ﷺ, he used to make a du'a consistently. And he used to say,

"Oh Allah, I seek refuge in You from the burden of debt and the control of men."

When you're in debt, You will be controlled by people. And that doesn't mean directly. That means you might have a jerk of a boss. You might have a wonderful boss, but a terrible job. You might have a terrible boss and a terrible job. You might have a great job and a great boss, but in a place that you don't want to be.

You are limited in your freedom when you are burdened by your bills. The best advice that I was ever given when I was in high school was as soon as you incur a debt, pay it off immediately. If you can pay something in cash, pay it.

Avoiding Unnecessary Expenses

You don't need a new car. You don't need a brand new house. You don't need things that as soon as you purchase them, they depreciate by 10-20%. Used is fine. You can find good stuff that's used. You have teachers, counselors, maybe even some of your parents that are still thousands and thousands of dollars in debt.

The Prophet ﷺ's advice was to stay out of debt as much as we can. Is it wrong to use debt at times? No. There's a difference between debt and credit. Credit is where somebody allows you to purchase something, you pay it off. Debt is where you're paying them back. Multitudes and multitudes over the amount that you took from them.

Student Loans and Education Financing

So if you don't need to take out a loan, don't take out a loan. This goes into the issue of student loans. If you're not able to pay for your education completely, then beware, beware, beware of student loans.

The best investment that you can make right now, regardless of where you're at in your education, is to get good grades. And then the second best investment is to take those good grades and a little bit of your writing prowess and invest in scholarships and grants. And try and milk as many resources as you can to pay for your education.

Going to a student loan should be the least, it should be the last resort from any of you trying to pay for your education. Because unfortunately, you'll find that the return on your investment might not be that great. I know a couple of people who graduated from college without any debt whatsoever. And they did it by working full-time, while going to school full-time, and supporting their families as well. But they were extremely diligent. And that diligence comes from one thing, budgeting.

The Importance of Budgeting

Budget your money. Budget your time. Budget your friendships. The amount that you put into something, if it doesn't give you something back, cut it off. It seems crass, but when you're in school, there's no time to play. If you're paying for something, you want to get the full amount out of it. So use your time wisely.

The Prophet ﷺ said,

"A believer is not stung from the same hole twice." (Bukhari and Muslim)

You go and you see a hole in the ground, you stick your hand in, Oh! Something bites you. Are you going to stick your hand in it again? No. So, if you've gone into debt, and you've felt how bad it feels for somebody to come and tell you, Pay me, pay me, pay me. Or you've seen your credit card bill, or you've had to pay your student loans, You say, man, 33% on this credit card, just because I'm a college student? My car insurance is this much, just because I'm a college student? Don't fall into that trap again.

Avoiding Consumerism and Being Productive

Don't allow yourself to get sucked into a cycle of consumerism. Where all you do is spend and eat and spend and eat and consume, and you don't produce. The Muslim should be productive.

If you don't, and you don't budget, you'll have an uphill battle of about 15 to 20 years before you get out of that debt and out of those problems. Budget your money. Budget your time. Even the way that you spend your time. Be very, very particular about how you spend your time. Who you spend your time with.

The Prophet ﷺ said that the example of a good friend and a bad friend is like the one who sells musk and the person that blows the bellows. Basically a person that works in a chimney. So you're either going to get something good from them or get something bad from them. So be very careful of how you spend your time. You don't want to spend the next 15, 20 years paying somebody off. You want to spend your time on vacation, making hajj, preparing for the future of your children, so on and so forth.

Taking Responsibility and Learning Self-Sufficiency

Man up. Or woman up. You guys don't like that. Get to work. One of the things that I see that's endemic in the Muslim community is the idea that we should be served at all times. The Prophet ﷺ he said:

"No one eats better food than that which he eats out of the work of his hand." (Bukhari)

The best, the most clean, the most pure thing that you can eat is that you've earned yourself.

So acquire skills while you're in college that will help you work, and they'll help you pay for your college, and they'll help you after you get out of school.

Practical Skills for Success

How many people here know how to use Excel? It's a good number. It's an excellent number, actually. How many of you can write scripts in Excel? So three people. I see the scientist. But scripts don't exist either, by the way.

Learn the heck out of Excel. Seriously. The best advice that I ever got, as far as computer stuff, was learning Microsoft Office. Learn how to use these tools. Because there's going to be somewhere, someone, somewhere that doesn't want to use them. And that will be the job that you can get in your computer lab, or your research lab, or you can get off of a job board, and you can earn some money to be able to pay for yourself.

And believe me, in business analytics and things like that, it really, really comes in handy. Take a coding class, HTML, whatever you can do. Be able to provide for yourself.

Self-Reliance and Basic Life Skills

I went to a friend of mine's house recently, and he was like, hey man, come over to my house, let's just sit around and talk. I said, okay, do you want me to pick up anything? Just bring some coffee. So I brought some coffee grounds, because I figured he had a pot or a coffee maker or something like that. He almost killed us. Because he didn't know how to turn on the gas stove. Because he's never made a single cup of coffee for himself in his life.

So know how to self-subsist. Your mother and father will not be there for you your entire lives. And you will find a certain honor of respecting yourself when you can do things on your own. Back up your information. All your computers. When I was doing my master's, I did not back up, and I lost half of my thesis. And I lost half of my sanity at that time as well. So back up all of your information, your sanity, and your advisors will thank you.

Contentment and True Wealth

Be content. The Prophet ﷺ said, "Wealth is not having a lot of stuff. But wealth is self-contentment. It's the wealth of the heart."

So just because you see people that seem to be having a fun time, they seem to be partying a lot, they seem to be doing things that are glorified in TVs and movies. And there are people lying about the stuff that they do on the weekends. They're actually not that fun. It's actually not that cool. And it actually is much worse for you in the long run than if you would just buckle down and do what you need to do while you're in school and get ready. And then when you're older and you're out of school, you're making your own money, and you're not spending somebody else's money that you'll have to pay back three to four times more of. So in the future, you can do whatever you want. You can have as much fun as you want.

Practical Money-Saving Tips

So while you're in school, cook. Don't eat out. Save your money as much as you can. Don't buy new. Buy used if you can. I know a student, he told me he uses, he goes, I use Slick Deals. I found out any campus events that have free food. And I always accept an invitation to someone's house to eat.

If you're going to college in town, live with your parents. Yes, oh, I should have to live with my parents. Number one, your parents probably aren't going to let you move out anyway.

Choosing Good Roommates and Living Situations

If you move to another city, and you have to go to college somewhere else, find good roommates. Remember what we said about good friends. Find good roommates who are going to be frugal. They're going to help you, not harm you. They're going to have the same values and the same goals that are aligned with yours. They're going to be content with little.

When you become content with a little, regardless of how much you get in the future, you'll always be able to go back to little when necessary. But if you're always used to being served hand and foot, to be entitled, to be treated, to expect certain things, lower your expectations, you'll have a much happier life, and you'll live much more content.

Work-Life Balance

And lastly, know that you don't live to work. You work to live. So allow everything that you do in your life to facilitate your life, not to facilitate your job. Don't make your job your life.

Investment and Stewardship

And lastly, invest. Invest your money, invest your time, and invest in yourself. The Prophet ﷺ said,

"Indeed, this world is sweet and green, and Allah has appointed you as stewards over it to see how you will act." (Muslim)

So you being responsible in your finances, in your life planning, shows that you are a good steward for the sake of Allah.

Debt Management Strategy

You should make a plan to invest. Pay off your debts, number one. In your budget, number one point should always be, if I have an immediate debt that must be paid, then I should pay it off at that time. If it's on a schedule, I pay it off monthly, I pay it off next month, I'm not going to go and starve because I have, I'm going to pay three months of debts off. If my debts are over the course of the year, one payment every month, then I make sure to allocate that money every month.

One of my friends said what I did in college, he said what he did in college was, he would take out envelopes. And after he made his list in his budget, he would write the names of those lists on each envelope, take his cash and put it in each envelope and seal it. So he knows when it's time to pay fees, it comes from this envelope. And guess what? When I keep looking into the food envelope, and it's only the fifth of the month, and I only have two dollars in there, I have a problem. And I know I can't go and open the other envelopes. So you automatically, physically see the money dwindling. You know when there's a problem.

Charity and Giving Back

While you're a student, you want to invest in your future. You're probably not going to be liable for Zakat while you're a student. You're probably eligible for Zakat, right? However, make it a point to always give your time and your wealth if you can. Give back. And you will see that that will come back to you thousandfold.

The Prophet ﷺ was asked, what type of charity is the greatest? The hadith is in Bukhari and Muslim.

"Which type of charity is the greatest?" He said,

"That you give while you are healthy and stingy, fearing poverty and hoping to become rich." (Bukhari and Muslim)