I have earned some money but I am not sure if it Halaal or Haraam. But what I want to know is can I use such money for my basic needs like food, water or can I use it for some other purpose like buying some clothes, appliances for myself? Also can I use such money to start a business of my own so that I can start earning Halaal money?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

You have to know that money is of three categories:

1)  Purely forbidden money: it is not permissible to own this kind of money or to buy food or clothing with it.

2) The second category is the lawful money: it is permissible to own this money and use it for buying and selling, and the like.

3)  The third category is suspicious money:

The scholars provide two different explanations about this type of money.

The first explanation is whether the wealth itself or what is earned is permissible or not.

The second explanation is about lawful and forbidden money mixed together. The position of a Muslim regarding such suspicious money should be as follows:

He should not avail of the money that is still suspicious (regarding its permissibility or impermissibility). The Prophet warned us that being involved in what is suspicious could lead to committing what is clearly forbidden, or make us a target for people's tongues and thus lose our dignity. It is reported in the narration of the Prophet : "That which is lawful is clear and that which is unlawful is clear; and between these two is that which is doubtful and ambiguous, which most people do not know. So whoever avoids the doubtful, safeguards his faith and his honour, but who ever gets involved in the doubtful, falls into unlawful activities." [Bukhari and Muslim]   

Allaah knows best.