Islam and money
Indonesian mosque officials count donations for the upkeep of the Jami Roudhotul Falah mosque following Friday prayers in central Jakarta. Apart from the voluntary donations, Muslims practice "zakat,: where a percentage of their annual savings are set aside for alms or charity for poor people during the period of Islam's holy month of Ramadan.
Religion has plenty of guidance for all aspects of modern life. That most certainly includes how we manage our money. Paying interest, tithing, charity, even how we should view the concept of money itself. Over the next few weeks we'll look at the role that the church, the mosque or the temple plays in our financial decisions.
This week, to mark the month of Ramadan, we'll start with Islam. Islamic finance is fundamentally shaped by its view of interest, or riba in Arabic. Dr. Yahia Abdul-Rahman is the author of "The Art of Islamic Banking and Finance." He also runs a mortgage firm in Pasadena, Calif. called American Finance House, LARIBA, which means riba-free.
He said that Muslims, like other faiths, consider money as a tool, not a measure of a person's character.
"Money is a measuring device and it measures the success or failure of an investment," Abdul-Rahman told Money host Tess Vigeland. "So money has to be invested back into the community to generate economic prosperity, job opportunity with prudence."
Islamic law is very clear about matters of money. There are defined rules about how much to tithe, or to give in "zakat," specifying different levels of giving based on how you earn your income. Learn more about Islamic philosophy regarding money and personal finance by listening to the audio above.