Have you ever made mistakes in your church budgeting?
It’s okay. We’ve all been there. The important thing to remember is that you can always adjust and do your best to rectify those mistakes.
However, today we’d like to help you avoid those pitfalls completely. Because when you avoid some major church budgeting pitfalls, you’re able to look at the upcoming year with more hope and it actually frees you up to do more on-the-ground ministry. So let’s look at a few pitfalls that are easy to fall into and could have serious consequences for your church.
Church Budgeting Pitfall: Forgetting The Vision
This pitfall can come before you even start the budgeting process, and it not only affects your staff, but your entire church as well. Before you create your church budget, you should go through a process of setting annual goals for each ministry within the church. These goals should be practical, and each should have a strategy to be accomplished.
Most importantly though, your church budgeting goals should align with your church’s vision. We’ll save this goal-setting process for another post, but suffice to say, when you’ve set these goals for each ministry of your church, then you’re able to more easily build a budget that helps you accomplish those goals. And the hope is that when those goals are accomplished then your church’s vision is being accomplished.
Church Budgeting Pitfall: Forgetting the Numbers
Yes, we’re talking about budgeting. That means you need to get nitty gritty into the numbers. You probably have a dedicated accountant or treasurer who handles the bookkeeping and the documentation, but you, as the leader, need to come face to face with the numbers. Now, this doesn’t mean you need to be a micromanager, but good leaders are well-informed leaders. Spend some time with your church’s numbers so you have a complete picture and can help guide and institute a smart giving and spending strategy.
Church Budgeting Pitfall: Forgetting to Project
When planning your church’s budget it’s easy to simply look at the previous year’s income and hope to bring in that much again this year (or more). But a wise budget tightens the reigns a bit. In the Giving Rocket program, we recommend budgeting 90% of the current year’s giving for the next year’s budget.
You want to be surprised by the black on your balance sheet, not caught off guard by red.
While we all want to project that we will bring in more money this year than the previous year, nothing is guaranteed, which is why it is smart to err on the side of caution.
Once you have a projected income, you can start to project expenses. It’s great to learn from the past, and any mistakes or successes you may have made, but it’s absolutely crucial to also project spending for the upcoming year. Look at your annual goals and calendar and see what events and possible expenditures are coming. (Will your facility need major repairs or remodeling this year? Do you want to invest more in a successful annual event? Does a part-time staff position need to become a full-time position?)
Of course there are several other pitfalls you should avoid when creating a budget for your church, but these are some that are best to avoid even before you begin budgeting. And if you avoid these mistakes then it will help immensely throughout the rest of the budgeting process and help you become a financially healthy church.
Budgeting isn’t easy. But it’s worth the time and effort to have a healthy church and continue to do impactful ministry.
This is precisely why we created Giving Rocket — to help churches optimize giving and spend smartly. Want to learn more? We’d love to tell you more!