Set and manage your budget the way Christ would – with care, concern and transparency.
A good budget will put your church on a path thrive – not just survive. These 5-steps will help put your church on that path.
Step One – The budget is set and created based on your mission and goals
Create a budget based on your mission and vision, not need. The first step to creating a great budget is to hold a vision and goal setting session. Invite key staff, board members and key leaders and thinkers from your church. Determine what you want your church to achieve over the next 12 months – in specific areas, such as Outreach, Spiritual Growth, Leadership Development (volunteerism), Compassion, etc.
Step Two – Create a budget that is realistic – both from income and expense perspectives
It’s important to have several people look over the budget to determine if it’s realistic. Are the income numbers reasonable, are the operational expenses reasonable and is it possible to accomplish the goals associated with your mission and vision with the budget projected?
Step Three – The budget is a living document – you look at it weekly and make adjustments periodically
Financial reporting on a regular basis is the key to living within your budget. We recommend looking at income and outflow on a weekly basis. We also recommend creating a spreadsheet for the entire year with week-by-week projections for attendance, weekly giving and weekly expenses. You can update the spreadsheet with the actual numbers and compare them to your projections on the sheet.
Step Four – There are triggers in place for quick adjustments, both up and down
The advantage to a weekly budget is that adjustments can take place very quickly. We recommend putting in place triggers so adjustments can take place. We recommend a red, yellow, green condition to the budget as follows:
Green – you are operating within 5% of the projected budget (up or down)
Yellow – you are 6-10% high or low
Red – you are more than 10% over or under budget.
Step Five – The right people (key staff and board members) help create and adhere to the budget
The budgeting process should be collaborative. People will support what they help create. Every ministry leader should be involved in the budget creation process (not simply told what their budget is). Your key staff should be included in the budget process. Your key board members should also help with the budget creation – especially those with financial oversight.
Next Steps
The process described above has been used for several years in church budgeting and it works well. If you would like greater detail into any of the topics discussed above, we recommend attending one of the six-week Church Goals classes. The class meets once a week for six weeks and has available significant resources in the areas of budgeting and finance. Follow this link for more information: https://bit.ly/ChurchGoalsClass