How to Create a Church Budget

Sitting down to create a thoughtful budget isn’t everyone’s cup of tea. It is a big task, and the fact that the church is funded by its members’ generosity makes planning more difficult. Your giving may fluctuate depending on the time of year, adding an extra hurdle.

Moreover, this year brought a world-wide pandemic that has majorly changed the way churches function. Many churches are facing hard decisions going into the new year.

So how can you create a smart church budget for 2023?

In this post, we’re going to talk through why you need a church budget, how to create a budget, tools to make your budget more predictable, PLUS we’ll share a free downloadable budget template to help you get started.

Why You Need to Create a Church Budget

The money coming into your church is given by faithful people wanting to serve God and build his kingdom. By maintaining a smart church budget, you can keep track of where all your money is going and make sure it’s being spent the best way. Without a budget, it’s easier to overlook neglected ministries that could use more financial support. Make sure each program gets the financial support it needs by analyzing and planning your spending.

A church budget is a straightforward document when you think about it like this:

1. A church budget tracks the money coming in.

Before you can allocate your church fund, you need to have a good handle on your church’s spending and how it comes in. What months or services tend to have the most extensive offerings? What are your leanest months?

2. A church budget tracks the money being spent.

To say that church budgeting is keeping track of the money coming in and the money going out seems glaringly apparent. But it’s that simple. The truth is that your budget is only going to be as good as your financial awareness. The longer you keep track of the money coming in and out, the easier creating accurate budgets will be in the future.

3. Creating a church budget protects essential ministries.

The challenges you have doing home finances are similar to the difficulties a church experiences on a larger scale. If you eat out too often, you’ll soon find that you don’t have money for things you need. A proposed budget ensures you set aside money for something that you might not otherwise.

Without a healthy budget, there’s the possibility of critical but smaller ministries losing out to the needs of high-profile ministries. Having a set budget for children’s ministry or small groups allows you to set up a boundary to protect those ministries from the bigger ones that might eat up all of the funds.

4. Your church budget represents freedom.

Contrary to how it might feel going in, a budget is freedom. It represents liberty from:

• Debt: Being able to allot the church fund to go into savings or to pay extra on outstanding loans is the key to getting your church out of debt—and keeping it out.
• Ignorance: A church budget stops people from assuming they know where the church money goes and allows them to see how it’s being used.
• Competition: While you’ll probably never entirely do away with ministries competing over their budgetary line items (which is a good sign that your staff and volunteers are invested in their ministry), you can stop a lot of the regular competition for resources.

How to Write a Church Budget

A church budget is an itemized summary of your likely income and expenses in a given time period. Creating a budget for 2021 will help you set an expectation for the resources coming in and prioritize its use.

Planning and monitoring your proposed budget is the key to identifying wasteful expenditures. It will help you adapt better to changes in giving and will ultimately help you achieve your mission by setting financial goals.

Start with Your Income

Start with pulling in your income from the last year—the last couple of years if it’s available. If you have multiple years to look at, do you detect an upward or downward trend? If it’s upward, by how much? 5, 10, or 20 percent? That will factor into how you set your budget goals.

Where is your money coming from?

As you’re looking at past income, remember to consider every source of income. This could include:

• Offerings
• Donations
• Dues
• Facility rentals
• Trust funds
• Investments
• Bequests

Auditing Income Sources

Once you have all of your income sources in front of you, you can begin to look at which ones are static and which ones you have an opportunity to influence. You should also make a note of any income that may be coming to an end.

Pay close attention when money comes in, too. If you have specific services that get more offerings, special fundraisers that you do once a year, or seasonal income, make a note. It will help when you’re performing your quarterly audit to know where you should be at various points in the year.

Take Advantage of Mobile Giving

If you haven’t made a strong push toward mobile giving, the time has come. Fewer people coming to your church every week are carrying cash or checks. Upwards of 80 percent of them have mobile devices that they’re comfortable using to make purchases and do their banking. You’re missing out by not helping them get more comfortable with mobile giving.

Churches like Angelus Temple in LA have seen weekly increases of 15 percent by encouraging mobile giving.

Set Your Projected Income

Once you’ve audited all of your sources of income and considered your trending revenue for the last few years, it’s time to set a projected income from each source and a total for the year.

Budgeting for an Increase

If your revenue the last couple of years has been trending up, plan for your income to go up again. If the trend is 15 percent, talk to your people about planning for at least a 20 percent increase. Your budget must be a faith-filled document. You want to set it just outside of your reach—this gives your people something to rally around and gives room for God to move.

As you get more comfortable getting your church to rally behind goals, learning to create momentum, and finding exciting ways to bring in funds that are lacking, you can set more ambitious goals. But for now, start with a modest increase above your trend.

What if we’re trending down?

If your church has been trending down, the same idea applies. You want your church budgets to reflect your faith that God has plans for your church and its effectiveness. Maybe your act of faith could be planning a budget that’s flat with last year. Or perhaps you want to dream big and budget for an increase of 2 to 5 percent.

Whatever you do, don’t budget for another decrease. Cast a faith-filled vision for your annual budget.

Set Your Budget’s Expenses

Now that you have your projected income, it’s time to plan for expenditures.

Look at last year’s expenses.

In what areas did you spend your income from last year? If you broke your expenses down into the following categories, what percentage of your income was spent in these (or similar) buckets:

• Facilities
  • Utilities
  • Insurance
  • Maintenance
  • Website
  • Office expenses
  • Kitchen expenses
  • Depreciation
• Staff
  • Salary
  • Ministry-related expenses
  • Travel
  • Insurance
  • Housing
• Debt
  • Property
  • Building
  • Miscellaneous
• Ministries
  • Missions
  • Pastoral needs
  • Educational ministries
  • Music
  • Youth
  • Miscellaneous
• Benevolence
• Savings

Did the percentages spent on these various line items reflect your missional priorities? You can adjust your budget for any areas that need to be cut down or increased. Also, keep in mind any ministries you want to start or positions you would like to hire for in the new year.

Begin plugging numbers into these items until the expenses match your budgeted income. If you can’t make the numbers work, you will either need to cut out some of the costs or make a group decision to raise your budgeted amount.

When your income and expenses match, you have a budget. Congratulations!

Auditing Your Budget

Anyone can make a budget. The key is working on your annual budget to ensure that your income and expenses are aligned.

At least once a quarter, you should just go over the line items in your budget and see how you’re doing. Have you had some surprise expenses? Did you offset it with budget decreases elsewhere? Have you brought in the income you were hoping for? If not, how close are you, and do you need to cut your budget back a bit?

There needs to be a decided protocol for what you’re going to do with extra income or shortfalls in revenue. When you have a significant increase in giving because of your new Pushpay app, is that going into savings, a particular ministry, or a new staff member? If you need to make up a budgetary shortfall, do you have a plan in place to raise more funds or cut some expenditures?

How to Make Your 2023 Church Budget More Predictable

In most churches, traditional offerings are a barrier to static giving. People have one five-minute opportunity to give during the service. If they don’t have cash or checks on them or are not in the sanctuary, they miss their shot. And if they don’t give more next week to make up for it, your church budgets suffers.

Mobile giving allows them to give at any time from anywhere. The mid-service offering is no longer an obstacle to generosity. People can give as quickly as they can order a pizza or get an Uber.

“Before we started using Pushpay, it was easier to order a pizza on your phone than it was to give to our church. While our registered members grew, we saw a steady decline in average weekly giving per family over the last five years. We have now overcome that and feel confident that we are setting up the Millennials to share their stewardship of treasure in the way they know how…on their phones. The first month of giving on Pushpay saw an immediate increase in participation and dollar amount.”

—Stephen, Lenahan, Stephen Lenahan Director of Development & Communications, St. Anthony of Padua Church.

Taking Advantage of Recurring Giving

Pushpay users have the option of choosing a predetermined amount to automatically take out of their bank account at whatever interval they choose (weekly, monthly, etc.). It’s called recurring giving—and it can make a huge difference in your budgeting.

When church members take advantage of recurring giving, their giving becomes dependable. Whether they’re present or not, their offering comes in at the same interval—for the same amount. It doesn’t drop during the summer when they’re on vacation.

Recurring giving helps church members achieve the giving consistency they long for but might struggle to reach. They only need to be inspired to set it up once, and their giving becomes persistent—and so does your budget.

How to Encourage Recurring Giving

Recurring giving might sound like a great idea, but how do you inspire people to try it out?

In the admin console, churches can turn on a feature that allows Pushpay to suggest recurring giving. When someone has established a rhythm to the amount of their donations, Pushpay prompts them to sign up for a regular schedule consistent with their normal giving.

Churches can also set up recurring giving as a default. When someone donates, they can choose to make a one-time gift, or the app will default to recurring giving. Many users are happy to stick with automatic giving when they see that it’s an option.

Generosity You Can Count On

By improving the process of giving and making it simple for donors to give regularly, your church will see more dependable generosity all year round and a more predictable budget. Ready to learn more? Schedule a call to talk to an expert today.

Free 2023 Church Budget Template

Ready to get started with your budget? Download our free Church Budget Template and begin setting your church up for financial success in 2023.

If you are the leader of a new church and looking to start your first budget, this template can also serve as a church planting budget spreadsheet.

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