Tag Archive for: creating budget

“A solid budget and spending plan creates trust between church leaders and church members, which is important because so many people lack trust in churches to manage money well because of past experiences they have had.”

Happy New Year! As we kickoff this fresh year, we’re tackling an important topic: Church budgets.

Most people who find themselves on staff at a local church didn’t go to school for finance or accounting. Few (if any) seminaries have classes about creating or maintaining a church budget. Wise stewardship of parishioners’ tithes can definitely fall into the “nobody-taught-me-how-to-do-this” area of ministry. But if the local church is going to handle money in a trustworthy, God-honoring way while also funding the important work of ministry that church members do, establishing an effective church budget has to be a top priority.

Whether you’re getting ready to plant a church or you’ve become a leader at a centuries-old church that doesn’t have the most solid budget, the best time to create a church budget was yesterday. The second-best time to create a church budget is now.

But where do you even start? How do you create a solid church budget from scratch? Here are a few considerations when creating a church budget to get you started down the right path:

1) Consider your values.

Before you get into the weeds of dollar amounts, giving trends, and bookkeeping details, you need to be sure that the budget you’re creating is reflective of your church’s values and the needs of your church family. If your church is mostly made up of young families, it makes more sense to allocate more funds toward the children’s ministry than the senior adult ministry. If your church sits near an underprivileged neighborhood where you do regular ministry, it probably makes more sense to allocate more funds toward that work than it does toward another ministry effort that, though worthwhile, doesn’t fit the work of your church body quite as well.

Ultimately, if you don’t make your budget align with the values of your church, it won’t matter how well you evaluate giving trends or track spending. Why? Because your church members likely won’t give with the same consistency and generosity as they would if your budget aligned appropriately with the values and unique context of your church.

2) Evaluate past and projected giving trends.

Most church giving experts recommend not relying too much on past giving trends or projected giving trends when creating a church budget, but to consider both past receipts and future projections. Every church is different, but generally speaking, creating a church budget based on past giving trends may cause you to create a budget that is too conservative, and misinterpreting future giving trends may lead you to create a budget that overestimates the dollars your church will receive in the coming months and years.

It is a good idea to examine the last few years’ giving, figure out what the “minimum” giving situation may look like to give you a sort of baseline off of which to work, and then project some increase based on higher church attendance or other similar factors.

Again, every church is different and your church’s context may lead you to consider putting more emphasis on either past or future giving…and that is okay! Just be sure to consider all possibilities and not marry your budget to one or the other too strongly.

3. Track every dollar collected and spent.

A fine-tuned budget established by a careful evaluation of past and future giving trends and defined by the values and work of the ministry can be completely and devastatingly sidetracked by poor accounting. What good is a budget if church leaders aren’t intimately aware of how much money is being given to the church in a given week and how much money the church is spending in a given week? Creating an effective budget but not tracking giving and spending is like buying a $300,000 Lamborghini and letting your teenager use it for driver’s ed—it’s foolish and dangerous!

It’s true: tracking every dollar your church collects and spends can be cumbersome. There’s no doubt about it. But effective money management is the gasoline that makes an effective church budget run. By tracking your funds, you provide your church members with a sense of trust that they deserve, and you make your budget more effective for future years.

Budgeting is important! It’s important for families, and it’s just as important for church families! A solid budget and spending plan creates trust between church leaders and church members, which is important because so many people lack trust in churches to manage money well because of past experiences they have had. At the same time, a church budget that is created with your values in mind and maintained by wise financial tracking will make your ministry more effective and help you reach more people with the gospel that we have been charged to share with the world.

Don’t neglect your church’s budget! Make one today.

When you use One Church Software, all of your giving, accounting, and people records are seamlessly connected within your church management software. Learn more about accounting within One Church >>