3 Most Important Things to Include in a Church Budget
A church budget is an essential component of effective financial management for any religious organization. Think of it this way: your budget serves as a roadmap for utilizing available financial resources to support your church’s mission and goals.
Establishing, following, and regularly monitoring a church budget ensures that your finances work for your church, not against it:
Maintaining a sufficient cash flow for bills, salaries, and expenses
Improving credit score
Controlling spending
Increasing savings
Preparing for emergencies and unplanned expenses
In this blog post, we will discuss the three most important things to include in a church budget to ensure that it is comprehensive, accurate, and effective.
3 Key Church Budget Items & Why They’re Important
#1: Personnel Expenses
Church personnel costs include not only the expenses of hiring and retaining qualified staff members, but also providing them with the necessary benefits to attract and retain the best personnel.
The salaries and benefits of church staff and leaders
making them the most significant expenses for any church. As such, these expenses should be carefully planned and budgeted as they’re essential for the day-to-day operation of the church.
#2: Building & Maintenance Overhead
The cost of maintaining and operating a church building and grounds can be significant. This includes expenses such as utilities, repairs and maintenance, and insurance.
Facility expenses should be budgeted for and monitored closely to ensure that the church is able to maintain its facility and keep it in good condition. This not only ensures that the church has a suitable environment for its congregants but also preserves the assets of the church.
Another option is to create passive income by diversifying the types of income-generating activities your church engages in. Consider renting out your church facilities for events, offering classes or workshops, or providing services such as counseling or church retreats. Additionally, you could explore opportunities to invest in businesses or real estate that generate revenue.
#3: Outreach & Mission Costs
The outreach and mission of the church are an integral part of its overall mission and purpose. These expenses can include things like community outreach programs, mission trips, and charitable donations. These expenses should be budgeted for and tracked closely to ensure that the church is able to make a positive impact in its community and around the world. This ensures that the church is fulfilling its role as an active participant in the community and promoting its message to a wider audience.
In conclusion, a church budget is a crucial tool for managing the financial resources of a church and ensuring that it is able to meet its mission and goals. By including these key items in the budget, a church can be confident that it is utilizing its resources effectively and efficiently to support the work that it is called to do. Furthermore, it will help the church to be more transparent and accountable to its congregants, stakeholders, and donors.
What’s Your Next Step?
The good news is that you don’t have to manage your church finances alone. Finch helps churches of all sizes across the U.S. to be faithful with their finances, have deeper insights into their budgets, and plan ahead to face difficult times like a recession.
Corey has 10 years of professional experience in financial planning and analysis. His previous areas of focus involved helping launch the Financial Services department of a large government contractor, where he developed the various reporting and budgeting systems.
Corey also actively manages Shorebird, a Registered Investment Advising firm that focuses on Financial Advising, Planning, and Investment Management for clients. He is also an adjunct finance professor at the University of California, Riverside for their graduate-level programs.
Corey received a B.A. in Business Administration at the California State University, San Bernardino; a Masters in Business Administration and a Masters in Finance from Indiana University’s Kelley School of Business.
Jonathan has more than 7 years of professional experience in corporate taxation and strategy with both public and private companies. His industry experience includes entertainment, church finances, medical device, and technology. Jonathan is also an adjunct professor at the University of California, Riverside (named a Best Business School by Princeton Review and named a Best Undergraduate Business School by Businessweek) and speaks at conferences on topics such as leadership and management.
Jonathan is a graduate of the University of California, Riverside and an MBA candidate at UCLA Anderson School of Management. He is a licensed Certified Public Accountant (CPA) in California.
Jonathan previously worked at PricewaterhouseCoopers, LLP where he specialized in corporate taxation.
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