Smart Finance Tips to Prepare for Observing Ramadan
Ramadan is a deeply spiritual and transformative month for Muslims around the world. It’s a month focused on the Quran, prayer, fasting, and reflection.
While the goal is spiritual growth, cultural practices in Ramadan can become a financial strain for many families, from food and gatherings to Eid preparations.
This raises the question: How can Muslims observe Ramadan in a beneficial manner without wasteful extravagance?
For Muslims trying to keep to moderation, planning is key. With thoughtful Ramadan preparation and a little financial planning, you can focus on the spiritual essence of this blessed month without stress. Here’s your complete guide to preparing wisely.
When Is Ramadan?
Ramadan is the ninth month on the Islamic calendar, expected to begin Feb. 18 or possibly Feb. 19, 2026, as the exact beginning and end dates depend on the sighting of the crescent moon. It lasts 29-30 days.
This month is considered one of the holiest months of the year in Islam. The annual observance of Ramadan is regarded as one of the five pillars of the Islamic faith.
How Is Ramadan Observed?
In the holy month of Ramadan, healthy adult Muslims fast during the daylight hours each day. The Ramadan fasting is a form of spiritual cleansing. The effects go far beyond the physical health benefits: It strengthens self-control and empathy and retrains focus away from worldly activities.
Fasting is considered a means of purifying the body as well as the spirit. Many Muslims who are observing Ramadan also try to increase their reading and reflection on the Quran, pray extra taraweeh prayers at night, do more good deeds, and give extra charity. Efforts increase even more during the last ten days, which are seen as especially blessed.
The daily fast during Ramadan is obligatory for all adult Muslims who are not sick, traveling, elderly, breastfeeding, pregnant, or menstruating. Children may practice in order to begin learning the lessons of Ramadan, but they are not required to fast.
Daily Life in Ramadan
In Ramadan Muslims eat a predawn meal before the morning prayer, called suhur, and then they don’t eat anything all day until the sun sets. The meal that breaks the fast at sunset is called iftar. At sunset, families traditionally break their fast with dates and water before performing the Maghrib prayer.
In the evening, after fasting all day, families and friends gather to break the fast with a meal called iftar. In Muslim communities, mosques frequently host iftar dinners, and families often host each other for meals and sometimes share food with others who are in need.
The holiday Eid al-Fitr marks the end of Ramadan when the new moon is once again seen. This holiday is celebrated with communal prayers and festive gatherings.
Avoiding Financial Strain With Mindful Ramadan Preparation
While the point of observing Ramadan is spiritual growth, the month also brings increased food preparation, hospitality, and charity. As people celebrate Ramadan, there may be extra social pressures as families and friends gather together in festive gatherings around meals to break their fast.
Many Muslims decorate their homes and put out Ramadan-themed tableware during the month. This kind of Ramadan preparation can bring a festive feel into the home, but at the same time, expenses can sneak up without notice.
Mundane concerns like finances are not top priority during this blessed month, but a little wise planning can help maintain balance and prevent waste.
How Can You Financially Prepare for Ramadan?
If you have an hour or two, it can be helpful to begin preparing by reviewing last year’s spending to get a sense for where money is going.
You could look at:
- Grocery bills
- Hosting expenses
- Eid clothing & gifts
Are the totals in line with what you expected? If not, you may identify areas to be more mindful this year.
Create a Ramadan Budget
Next, you can create a Ramadan budget.
Break it into categories:
- Groceries
- Hospitality
- Eid expenses
- Miscellaneous
Allocate realistic amounts of money for each category, and stick to them.
Wants vs Needs: Financial Tips for Ramadan Preparation
Another useful exercise is to decide as a family on Ramadan needs vs. wants.
Needs might include the following:
- Groceries for Suhoor & Iftar
- Charity (Zakat and sadaqah)
- Eid clothing
Meanwhile, here are some typical wants:
- Elaborate decorations
- Excessive desserts & specialty drinks
- Expensive new outfits
- Over-the-top Iftar spreads
- Daily takeout
When deciding on a budget, this makes it easy to prioritize the needs first, and then decide whether or not to add the wants. It can also make it easier to consider how much money you want to spend on items like decor that will be in storage for the rest of the year.
After all, Ramadan is about spiritual discipline and self-restraint, not indulgence.
Ask yourself before buying: “Is this enhancing my worship?”
Tips for Cost-Effective Meal Planning (Suhoor & Iftar)
Food costs often rise during Ramadhan, but they don’t have to. Here are some easy tips for controlling costs.
- For the suhoor meal, choose filling, affordable staples: oats, eggs, yogurt, beans, whole grains.
- Buy foods like rice, lentils, and dates in bulk.
- Make food at home when possible, avoiding takeout and processed packaged foods.
- Keep meals simple. Cook extra and reuse leftovers.
- Plan weekly menus to avoid impulse grocery trips.
Smart Shopping Strategies:
- Shop with a list
- Compare prices
- Avoid shopping right before iftar when you’re hungry
- Freeze pre-prepped meals
Pro Tip: One-pot meals (soups, stews, rice dishes) reduce waste and cost.
Hosting Guests Beautifully Without Breaking the Bank
Ramadan is a time of community, but hospitality doesn’t mean extravagance.
In many cultures, iftar gatherings are a common practice, and in some Muslim communities, these events have become more and more elaborate and fancy. But it can be useful to remember that the ultimate goal of Ramadan isn’t fancy parties but rather reorienting one’s focus spiritually, back to worshipping Allah (God) and doing useful actions that benefit oneself and others.
When hosting guests, remember what’s most important: To provide beautiful company and a delicious and filling meal. Expensive decor and spreads that threaten to overflow the table are extras that require more effort and expense, and they take the host’s attention and energy away from worship. As with most everything else in Islam, the key is to find a balance in moderation.
Here are some tips for hosting without excessive waste.
Budget-Friendly Hosting Ideas:
- Serve one to two signature dishes instead of five or 10
- Use simple decor (lanterns, candles, table runners)
- Make homemade desserts instead of ordering
If you’re hosting often or large gatherings, consider taking turns with potluck-style iftars. This makes it easier for everyone, and the host can enjoy the evening as well.
Remember: Guests remember warmth, not the menu size.
Practicing Charity in Ramadan
Charity is the one expense in Ramadan that is clearly encouraged. Still, there are tips to consider.
Types of Giving:
- Zakat – This is an obligatory form of charity set at 2.5 percent of a person’s total wealth each year. Many Muslims choose to give their zakat during Ramadan to enjoy extra rewards.
- Sadaqah – This is voluntary charity that goes beyond the required Zakat. It is considered praiseworthy as well.
Financial Tips for Giving Charity:
- Calculate Zakat early. You can use online Zakat calculators such as the one at IslamicFinder.org.
- Allocate a fixed daily or weekly sadaqah amount
- Automate donations if possible
- Support local families quietly and consistently
Remember: Give wisely and sustainably.
Final Thoughts: Align Spending with Spiritual Goals
Ramadan teaches restraint, gratitude, and generosity.
Financial discipline during Ramadan reduces stress, prevents waste, and allows more focus on worship which brings about personal growth and a sense of peace.
The most successful Ramadan isn’t measured by how full the table is, but by how full the heart is.
Best Wishes from Guidance Residential
Ramadan Kareem! If you’re looking for a new home to spend next Ramadan in, we would be happy help.
Guidance Residential remains the #1 U.S. Islamic home financing provider, with more than 40,000 families assisted over more than 20 years. Learn more about our co-ownership model of Islamic home financing, and get started on your home finance journey today.
Your Guidance Residential Account Executive is here to help with any questions. Looking to refinance or purchase? Have a friend or family member who is looking for a home? Call 1.866.Guidance, or start an application today.
