Developing Church Budget

Even if you’re not a “spreadsheet” kind of guy, developing a budget for your first year of church planting is strangely exciting. It requires a tremendous amount of faith (since you’re largely just declaring numbers out of thin air with no past years’ performance to compare to), but it’s also one of those incredibly helpful steps that begins to transform a lofty 30,000 foot vision into a more “boots on the ground” reality.
As you look at that blank spreadsheet and you’re wondering where to start, here are three principles that hopefully both simplify the process and ensure healthy financial patterns from the very beginning.

Most church planting budgets are generally broken down into three broad categories: personnel, operating expenses and missions. You can easily find metrics out there from professionals that tell you what percentage of your annual budget each category should fulfill (e.g. 40/50/10), but I hold these ratios loosely. Why? Because these ratios are often geared toward more traditional, established churches in self-sustaining, suburban contexts. They don’t typically consider bi-vocational strategies, the rising (and ridiculous) cost of urban ministry or post-Christian contexts where tithing to your local church is not a cultural norm.
This is where you will be served well to reach out to other local church planters, or even established churches, to learn and imitate. Honest conversations with other like-minded pastors, in the same city, with similar ministry philosophies will be an invaluable resource. Most church planters will be happy to share their year-one budgets with you and give you a real-life anecdote of how much it costs to do both life and ministry in your context. My greatest encouragement here: Don’t be afraid to ask the most personal questions! “How much should my salary be?” “How much is the cost of living here?” “How much should I pay a part-time worship leader in our city?” “What’s a reasonable amount to spend on ______?”
Traditional ratios might be helpful, and a lot of time they are good benchmarks to move toward, but other local planters and pastors will be invaluable. Don’t feel the need to reinvent the wheel—take someone out for coffee, and learn everything you can!

There’s no doubt that the early years of church planting require a tremendous amount of sacrifice, often with very little compensation in return. For most church plants (let’s just be honest) this is the normal path, and not much can be done about it. But what’s survivable in the first year or two is rarely sustainable in the long run. The church planting journey is already, by its very nature, filled with dozens of stressful realities that make life and ministry incredibly challenging. But the tendency to absorb a “poverty theology”—believing we are more loved, accepted and righteous before God because we are foregoing a sustainable salary—is both dangerous and wrong. In fact, in my opinion, it’s often the reason planters’ families are unhealthy, unhappy and burning out. It’s not because they don’t have enough money. It’s because they have an incorrect view of God and their role in His mission, and one of the many implications of that is undue financial stress.
As one of my pastor colleagues has said, “Sustaining a significant work load for little compensation for an indefinite period of time is the perfect recipe for burning out a leader.”
Asking, “Is this sustainable?” shouldn’t necessarily prevent us from budgeting a certain way, particularly in the first few years, but it is a healthy guardrail as you look into the future. Ensuring that you, your staff and your family are financially healthy as quickly as possible is a great contribution toward long-term effectiveness.

Admittedly, there aren’t a whole lot of guarantees in the church planting journey, and we’re certainly not promised “success” year after year. This is about taking a giant step of faith and taking uncomfortable risks for God, right? So it only makes sense that our church budgets would reflect that!
That being said, from the very first budget you scratch out on a napkin, to subsequent years long after you’re off and running, your annual budget development is a fantastic time to breathe life into your leadership and church as well as remind yourselves what it practically looks like to take big steps of faith.
I’ll be honest, revisiting our budget every year is a time filled with a little bit of anxiety—we’re taking risks, making jumps and asking, “Do you really think that’s possible?” But the more we look at God’s past faithfulness, the more we trust Him for future provision. I hope we never face a day where we walk away from a budget meeting essentially saying “we’re asking very little from God this year.” No, we want to put everything on the table and give it all we got. And so, each year as we finalize a budget we very simply ask, “Does this reflect the very things we believe God has called us to?” When it does, we can look forward in anticipation to God doing great things!
Bonus tips:
It’s tempting to save money and do bookkeeping in-house in the beginning. If at all possible, avoid this. Starting with a professional (and scaleable!) accountant/bookkeeper from the very beginning can seriously simplify your life. Many Christian firms offer substantial discounts the first year and can actually help you in establishing a budget based on their experience. We’ve had great success with Finch Accounting, but whoever you choose, this is definitely an item worth outsourcing!
Have someone double check and sign off on your budget once it’s finalized—perhaps your Sending Church or a local partner church. The reason is twofold: on one hand, you’re getting an outside set of eyes on it in case there’s anything you missed and secondly, your people will appreciate the fact that you’ve gone to others for counsel (and trust me, someone will ask).