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13 Importance of Money in Islam

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Money is a medium of exchange. But, do you know if people still use a barter system in the past? A barter system is a transaction where a side changes his goods with other side’s goods. For example, if a farmer wants fishes, then he will search a fisher to change his vegetable with fishes.

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Now with money, people can buy everything what they want. Money eases trading. People have not to barter their goods, they only use money to get the thing that they want.

And it was confirmed by Imam Al Ghazali that Allah Subhanahu Wa Ta’ala creates dinar and dirham as a judge to determine or measure a price. So, the treasure can be measured by dinar and dirham.

In the history of Islamic economy, money as a medium of exchange has been printed since the time of Umar and Ustman. Even, money that was printed in the time of Ali is still saved in a museum, Paris. This shows that Islam has known money before long before Adam Smith, Father of Conventional Economic, wrote a book “The Wealth of Nations” in 1766.

In the book “Ihya Ulumuddin”, Abu Hamid Al-Ghazali has discussed a function of money in economic. He explained that sometimes, someone has a thing that is not needed by others, but he needs something that he does not have it. In the barter system, a transaction can only happen if both of sides have two needs at a time. One side needs a thing of other side and vica versa.

Indeed, money does not give a benefit or a usage, but the function of money can give a usage. Money can become useful if it is changed with a real thing or if it is used to buy a service. Because of that, money cannot become a commodity or a thing that can be traded.

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So, what are the function of money in Islam? In this chance, we will discuss about the importance of money in Islam. Please check them out.

The Importance of Money in Islam

Money have many function in our lives. Without money, we cannot buy or get something that we want. Here are some importance of money in Islam.

  1. As a measure of price

It is the most important function of money. Money is a value or the standard of price measurement in the transaction of goods and services. By money as a value, it eases a transaction in the society economic. Al-Ghazali argued that money is like a mirror. It can reflect the price of thing. So, people can buy it by using money.

  1. As a store of value

Money as a store of  value is meant that money is a way to change purchasing power from the present to the future. Sometimes, people who get money do not spend all of their money in one time. But they set aside their money to buy a thing or a service that they need later or they save it to unexpected events. 

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  1. As a medium of exchange

In Islam, money has a clear function. It is as a medium of exchange. It can be functioned to get a thing or a service. Because of that, money cannot be used as a commodity.

  1. As an unit of account

In the book of Imam Al-Ghazali, he said that if we do a barter transaction, we need an unit of account or a provision (a contract).

  1. Use it well

If we have money, we have to use it entirely right as the law of Shari’a economic in Islam. So, it can make money to be more blessing.

  1. Avoid riba

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We have to use money according to Shari’a because it can avoid riba. If we have money, we must arrange it well. Do not force to buy something, if we do not have money or it is not important for our lives. Do not let us borrow money from the bank that as we know, it is a riba.

See also : Law of borrowing money at Banks in Islam

  1. To pay zakat

If we get many profits from that trading, we have to do the fifth pillar of Islam. It is paying zakat. Give some money to people who have right as a recipient of zakat.

  1. Gold money can be a savings tool

Gold money can be used as a savings tool because its price is relative stable. The value of gold money does not have a sharp fluctuation. Because the value of money is as same as its intrinsic value.

See also : Tips for saving money inRamadan

  1. Money is a mirror

Based on Al-Ghazali in Gamal, money is compared a mirror that does not have color, but it can reflect all of colors. It is meant that money does not have price, but it can reflect the price of all goods.

Or in the term of classical economic, it is mentioned that money does not give a direct utility function, but if that money is used to buy goods, then that goods will give a usage for someone who buy it.

  1. Money is public goods

Whoever storing up money or let it unproductive, then they decrease the stocks of money in circulation. It can disturb the economics of country and hinder the process of trading.

  1. Money can trigger an inflation

The trading of money can trigger an inflation. As we know, the trading of money is one of Riba form that it have more bad than its benefits. It can affect the price of goods, including to the price of grocery and fuel.

  1. Ease trading

Money can ease trading. People must not search a person who want to barter with his thing. As long as, they have money, they can buy everything what they want.

  1. Do not hoard money

Based on Al-Qur’an, Al-Ghazali condemns people who hoard money. That people is called a criminal. Hoarding money is meant that withdrawing money from circulation.

“O you who have believed , indeed many of the scholars and the monks devour the wealth of people unjustly and avert [them] from the way of Allah.

 

And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment.” (Q.S. At-Tawbah : 34)

See also : Prohibition of hoarding in Islam

Thus the article about 13 importance of money in Islam. Hopefully, we can use our money well and do not spend it for nothing. Thank you.

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