“Faith-based budgeting” does not mean simply guessing at a projected income for our congregation next year, and then hoping to reach it! It involves two dimensions:

  • Spending the church’s money according to priorities that model First Fruits Living and using the rest of the income in a specific order (see Faith-Based Budgeting, Part 1), and
  • Making clear-eyed decisions that connect and communicate our faith with solid financial practices.

For this second dimension I want to share of some ideas from Financial Peace University founder Dave Ramsey.

Ramsey says there are five essential things in a healthy church budget:

  • The budget’s priorities reflect the church’s mission statement;
  • It is based on projected income, not just what we’ve received in the past;
  • It includes a spending plan;
  • Our leadership agrees on the plan; and
  • We communicate the plan clearly to all involved.

It’s also essential to put a review process in place, to be able to adjust as we go along.

So what if our congregation is not in a healthy financial place yet? Ramsey recommends striving to achieve these six goals:

  1. Save three to six months of operating expenses, set aside for emergencies.
  2. Pay off all church debt, except the building mortgage.
  3. Pay market rates for our staff.
  4. Establish a separate fund for big-ticket building-and-grounds maintenance expenses.
  5. Pay off the mortgage and lavishly fund our mission.
  6. Set aside a percentage of savings specifically for future needs.

This process can help our church household become more effective in our ministry, built on a strong faith foundation.

Your partner in ministry,

Betsy Schwarzentraub

See also: Local Church Committee Planning Sheet