Dubai Islamic Bank: Budget Analysis and Financial Options Report

This report analyzes the budget planning, credit cards, and personal loan options. The report begins with an introduction to budgeting, followed by a discussion of two options: credit cards and personal loans offered by Dubai Islamic Bank. The analysis includes the pros and cons of each option, such as the convenience and rewards of credit cards versus the potentially lower interest rates of personal loans. The report then presents an initial and a final budget, demonstrating the allocation of funds and expense management. The conclusion emphasizes the effectiveness of budgeting in managing income and expenses and recommends the use of credit cards and personal loans when managed carefully. The report also includes references and an appendix with detailed budget breakdowns.

BUDGET BUSINESS

Contents
INTRODUCTION...........................................................................................................................3
Options for consideration.......................................................................................................3
Discussion...............................................................................................................................3
CONCLUSION................................................................................................................................4
REEFRENCES................................................................................................................................5
Appendix..........................................................................................................................................6

INTRODUCTION
Budgets are mainly prepared to allocate funds for various business operations and mark the
income generated from these activities for company in specific time manner. A budget is a
strategy to fund planned operations (Boyabatlı, Leng and Toktay, 2016). Company forecasts may
provide a forecast for sales or expenses defined by goods or services, development forecasts. In
this report, initial budget and final budget is prepared, two expenses option for consideration are
discussed. In addition, proper recommendation is discussed that states the process to reduce the
expense over specific option. In this, report Dubai Islamic Bank is selected which provide
different credit card and personal loan.
Options for consideration
Option 1:
Credit Card: - A credit card system is type of retail transaction settlement and credit system,
named after the small plastic card is different from a debit card in that the credit card issuer loans
the consumer money rather than having the money removed from an account (Erlina and Muda,
2017).
Plus Minus Interesting
Money from transaction
credited into suppliers
account within 2-4 days
Paying high rate of interest.
If user carries balance from
more than month user will
pay interest charges. Other
fees can quickly add up.
Provide cash availing
facility. Credit card
generally provide free credit
period.
No cash involved Credit damage missed credit
card repayment and going
debts are recorded on users’
credit files.
Cards provide for personal
accident insurance
Option 2:
Personal Loan: Dubai Islamic Bank provides a type of unsecured loan which provides help to
individual to fulfil their current financial needs and desires in order to spend their life (Erlina and
Muda, 2017). Personal loans help families deal with any difficulties they might have in the
buying of a home, a vehicle and kid's higher education.

Plus Minus Interesting
It act like pocket friendly
repayment system.
The documentation process
of personal loan is
comparatively easy.
There will be no restriction
on loan purpose
They are generally
economical their interest
rate is comparatively very
high as compare to other
instruments.
Credit history also essential
part for taking loan.
They are available for bad
credit
Need no collateral or
guarantor
Useful for any personal
needs.
Discussion
From the above discussed option it has been stated that credit card and personal loan both
have positive and negative over the overall Phuong's Fortnightly budget. The same have been
discussed underneath:
Credit card: It provides a very easy way to do any form of business transaction as almost
each kind of company accept payment through electronic cards. This also contribute in making a
better banking history for the user as timely payment of card bill support to build strong financial
status which further support to take advantage of any bank product. Credit cards also grant the
chance to receive bonuses for dollars, gift cards, miles points etc. for the purchase. Credit cards
grant user a credit cap to expand their buying power (Chohan, 2017). This cap makes
them assume that they really have more cash than actual but if they ignore while making
payment heavy fines can be charged.
Personal Loan: This kind of loan has a rate which is favourable as compared with rates
on credit cards or any other sort of loan. Mostly importantly the rate of return over personal loan
is fixed so individual have to repay the same amount every time until whole loan is repaid.
Among the most common uses of personal loans is to repay high interest credit card outstanding
(Elmendorf and Sheiner, 2017). If user is using a personal debt for consolidating any loan, then
they have the other outstanding debt it just seems new. Such as when credit card bills are paid
with a personal loan and afterwards start paying huge amounts again, as the user is dragging into
a pit that can feel unfathomable.
From the above discussion is can be stated that both option are favourable if managed and
control in specific manner and can be helpful in fulfilling the funds requirement at point of time.

Both these options are taken into consideration because the chances of risk are very lower and it
gives easy and advance of making payments.
CONCLUSION
From the above report, it is concluded that budgets are effective in managing income and
expenses for a particular time frame. Credit card and Personal loan are better option for
individual financing as cards can be used to make any kind of purchase or online transaction.
Similarly personal loan are valuable in making the payment of credit card bill or any other
outstanding loan.

REEFRENCES
Books and Journals
Boyabatlı, O., Leng, T. and Toktay, L. B., 2016. The impact of budget constraints on flexible vs.
dedicated technology choice. Management Science, 62(1), pp.225-244.
Chohan, U. W., 2017. Charters of Budget Honesty. Global Encyclopedia of Public
Administration, Public Policy, and Governance.
Elmendorf, D. W. and Sheiner, L. M., 2017. Federal budget policy with an aging population and
persistently low interest rates. Journal of Economic Perspectives, 31(3), pp.175-94.
Erlina, A. S. and Muda, I., 2017. Antecedents of Budget Quality Empirical Evidence from
Provincial Government In Indonesia. International Journal of Economic
Research, 14(12), pp.301-312.

Appendix
Initial budget
Amount
($) Per ($)
Total
($)
Income
Your take home pay 100 0.15 15
Other income 400 0.15 60
Home and utilities
Rent 10 1 10
Internet 2 1 2
Mobile phone 5 1 5
Other 0 1 0
0
Insurance and financial 0
Loans 2 1 2
Credit card 5 1 5
Insurance 2 1 2
In case of emergencies 0 1 0
Groceries
Supermarket 15 0.25 3.75
Other 0 0.25 0
Personal and medical
Cosmetics and toiletries 2 1 2
Hair and beauty 1 1 1
Medicines and pharmacy 2 1 2
Doctors and medical 3 1 3
Clothing and shoes 1 1 1
Sports and gym 2 1 2
Computer 0 1 0
Education 0 1 0
Other 0 1 0
0
Entertainment and eat out
Coffee and tea 0.5 0.25 0.125
Lunches bought 1 0.25 0.25
Take away and snacks 2 0.25 0.5
Cigarettes 1 0.25 0.25
Going out 2 0.25 0.5
Celebrations and gifts 0 0.25 0
Other 0 0.25 0

Transport and auto
Public transport 1 0.25 0.25
Uber 0 0.25 0
Car running cost 2 12 24
Airfares 0 12 0
Passport 0 12 0
Travel insurance 0 12 0
Other 0 12 0
Other 0 0.25 0
Total payments 66.625
Total receipts 75
Surplus for savings 8.375
Final budget
Amount ($) Per ($)
Total
($)
Income
Your take home pay 150 0.15 22.5
Other income 450 0.15 67.5
Home and utilities
Rent 9 1 9
Internet 3 1 3
Mobile phone 2 1 2
Other 0 1 0
0
Insurance and financial 0
Loans 4 1 4
Credit card 6 2 12
Insurance 4 1 4
In case of emergencies 0 1 0
Groceries
Supermarket 12 0.25 3
Other 0 0.25 0
Personal nd medical
Cosmetices and tolietries 1 1 1
Hair and beauty 2 1 2
Medicines and pharmacy 1 1 1
Doctors and medical 4 1 4
Clothing and shoes 1 1 1

Sports and gym 1 1 1
Computer 0 1 0
Education 0 1 0
Other 0 1 0
0
Entertainment and eat
out
Coffee and tea 1 0.25 0.25
Lunches bought 2 0.25 0.5
Take away and snacks 1 0.25 0.25
Cigarettes 3 0.25 0.75
Going out 1 0.25 0.25
Celebrations and gifts 0 0.25 0
Other 0 0.25 0
Transport and auto
Public transport 1 0.25 0.25
Uber 0 0.25 0
Car running cost 2 12 24
Airfares 0 12 0
Passport 0 12 0
Travel insurance 0 12 0
Other 0 12 0
Other 0 0.25 0
Total payments 73.25
Total receipts 90
Surplus for savings 16.75