Muslim and Debt: 5 Practical Steps to Freedom from Debt

Preface

I begin in the Name of God,

the All-beneficent, the All-merciful.

What is lacking in both behavioral economics and personal finance is the role of the soul or spirituality which is a central theme in a monotheistic worldview. What constitutes a ‘rational’ economic behavior? What is the core element of psychological and behavioral aspects of an economic decision-making? Is it the ‘mind’? How about the notion of a ‘soul’? What is the ultimate goal of managing our personal finance? It is mere financial freedom? 

In classical economics, the economic actor is assumed to be an unboundedly rational, will-powered and selfish agent in which rationality is defined in terms of material gain and profit, without taking into account a notion of spiritual dimension. Behavioral economics comes to the fore to argue that psychological, social and emotional factors sometimes stand in the way of economic actor’s tendency for rationality in making an economic decision. Yet, there is still no recognition of any place for soul or morality, as psychology is assumed to be ‘the study of the mind’.

In a bid to fill the theoretical lacuna in both behavioral economics and personal finance, this book attempts to examine the case of debt management in behavioral economics and personal finance through the lenses of Sahifah al-Sajjadiyyah which is a classical Islamic text on supplications.

In this book, it is argued that by advancing the concept of homo islamicus and asserting the role of the soul in explaining human behaviors, the monotheistic worldview of Islam can shed more lights on the roots of economic or financial decisions, such as incurring debt, that are to be made by an economic agent.

In particular, this work endeavors to address the following questions:

What is the definition of debt, in general, and consumerist debt, in particular?

What is ‘debt’ in Islamic textual sources and history?

What is Sahifah al-Sajjadiyyah and its Supplication 30 about?

What is the description of ‘debt’ in Sahifah al-Sajjadiyyah Supplication 30 and its recommended steps or measures toward freedom from debt?

This book is written as a sequel to Muslim Couple and Money: 8 Practical Financial Tips for Newlywed Muslim Couples (2016), and it is part of the Muslim and Money book series.

In closing, I wish you happy reading, and financial success in every stage of your life!

Mansoor Limba

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Introduction

Behavioral Economics

As the existing dominant school of economic thought which built on the classical theories of Adam Smith (1723-90) and David Ricardo (1772-1823), and refined by the theories of