Do you know why computers have the option to select Undo (Ctrl-Z)? Why pencils have erasers? And, if you’re old-school, why a product to blot out ink from a pen or typewriter called whiteout exist? Because we are not perfect. If you’ve made a mistake, welcome to the human race. The good news is that we don’t have to repeat them over and over again. We can learn from our mistakes and move forward with experience gained from the missteps. If you are new to church budgeting, you will make mistakes – and that’s okay. The good news is that you don’t have to make these five mistakes; I’ve already done that for you.
1. Not Aligned with the Mission, Vision, and Values
A sure-fire way to mess up a church budget is not to align it with the church’s mission, vision, and values. The truth is there is a never-ending list of good ways churches can invest their financial resources. That’s why staying committed to the calling God has for your church is so important. It allows your church to say no, even to good ministry opportunities, to pursue what’s best to accomplish your church’s mission. Stay on mission.
2. Improper Calculation of the Budget Target
Improperly calculating the income side of the annual budget creates several issues ranging from not fully utilizing donations to achieve the mission to depleting the checking account and going into debt. Let’s get this out of the way first; yes, your church needs to calculate the projected income for the year. To create the target, use this simple mathematical formula:
- Take the sum of the offering for the last twelve months
- Multiply it by the growth or reduction factor
- Add or subtract that number from the twelve-month offering total
Keep in mind that no one can predict the future, and adjustments are a necessary part of the financial responsibilities of leadership. Just think of all of the church budgets created in 2019 that were absolutely useless once the pandemic hit in March 2020. Pivots and adjustments have become almost normalized since then. But, that is not an excuse to not plan or prepare for the upcoming budget. Do the math and calculate the budget target.
3. Ignoring Healthy Percentages
I get it; comparing your church to others can easily lead to pride or insecurity. Either way, it’s not healthy. What is beneficial is knowing if your church is operating outside healthy norms. Use this link to see how much a church should spend on compensation, ministry, or operations. Think of it as checking the blood pressure of your church. You’re not checking it against someone else, but against an established healthy standard.
4. Preparing it Alone
If accountability, transparency, and collaboration are not a value in your church, by all means, build the budget alone in a vacuum. If you want to build trust and empower leaders, I highly recommend assembling a financial advisory team. In addition, be sure to gain input from all leaders with a vested interest in what happens in their ministry area. No one knows the needs of the High School ministry better than the High School Pastor. Use the team approach to building a church budget.
5. Omitting Praying
Seriously?! It may seem obvious, but we should seek alignment with God in everything, even church finances. To do this, we need to pray, and not only prayers for God to meet our church’s financial needs, but that we steward (manage) His money well. It is God’s money and His kingdom we desire to advance here on earth. Let’s remember to include God in the budgeting process.short url: