With a new calendar year comes a new financial year. If you’ve yet to put a financial plan in the place, here are some tips inspired by Luke 14:28

“For which of you, intending to build a tower, does not first sit down and estimate the cost, to see whether he has enough to complete it? Otherwise, when he has laid a foundation, and is not able to finish, all who see it will begin to ridicule him, saying, ‘This fellow began to build and was not able to finish.”

When Jesus talked about building a tower he wasn’t exactly talking about church budgets. Jesus was talking about the cost of being a disciple; a follower of Christ. We are advised to ‘think things through before we act; think about the consequences of our actions’. Surely this sound advice relates to all aspects of our lives, some may even call it common sense!

Certainly it is sensible then to be taking the same approach with our church finances.  If we are to ensure local mission and ministry continues, we need to estimate expenditure and think about how we resource God’s vision in our communities today and into the future.  After all, if we do not plan before we embark on that church extension, are we risking reputational damage or even ridicule if we fail to see it through?

A good way to plan is to set a church budget. Whether you’re completely new to budgeting, are familiar with a spreadsheet or have already jotted down some figures on the back of the latest church bulletin, this article looks to help with the fundamentals.

So what is a budget?

A budget is an estimate of income and expenditure over a specified period of time.  A budget serves as a statement of intent, of purpose and priority and should reflect the church’s mission.  It is a roadmap for the church in numbers and communicates how ministry will be provided.

What is the intent?

The way a local church uses generous gifts indicates its priorities and mission. “For where your treasure is, there your heart will be also.” (Matthew 6:21)  Only when priorities are clear can a suitable budget be prepared.  The priority may be as simple as resourcing and maintaining local church ministry at current levels, or if the church is planning a new missional activity and funds are required, a budget for growth may be needed.  The benefit of a budget is that you can make these decisions early on instead of resourcing initiatives on a ‘first come, first served basis’.


What is coming in?

Estimate what the income will be for the year. Look at income from previous years, is it a growing or declining trend? Where does most of the income come from? How much of this income is guaranteed? There is no point in drawing up a budget with increased PCC fees if weddings and funerals are declining.  If there is an increase in Sunday service attendance, it would be reasonable to estimate an increase in voluntary contributions to the church.

What is going out?

Estimate your expenses in the same way. It is best to break them down under headings. Again, review last year’s expenditure. The following headings may be helpful:

  • Parish Share
  • Church running expenses – insurance, maintenance, utilities
  • Mission giving and donations
  • Staffing costs – wages, social security and pensions
  • Governance costs – Independent Examination fees, PCC training

How do we draw up the budget?

Pull together your estimated lists of income and expenses, this is a quick and simple way of creating an initial draft. Make any adjustments for the rising costs of things like gas and electricity caused by inflation (the general increase in prices and the fall in the purchasing value of money). This type of budgeting is known as ‘incremental’ budgeting.

Be mindful with an incremental method as we don’t always want to recreate the past. Alternatively use a ‘zero-based’ approach; this means listing and reviewing all costs rather than referring back to the previous year. This method helps to justify all items of expenditure in line with the church’s priorities.

number crunching

A budget is usually prepared by the Treasurer but is approved by the PCC as Trustees who are ultimately responsible. It is important that whoever prepares the budget remembers to speak with all those involved to make sure that nothing is missed and everyone is mindful of the church’s priorities. Also consider other factors that may affect the finances: is there a loan to repay and could repayment costs increase? When is the boiler due for replacement?  It is best to also keep a note as to why a particular number was recorded, it might seem obvious at the time but you might forget six months later.

Consider building in some contingency in case things don’t go to plan. This could mean limiting expenditure early in the year until you get a clearer picture of how things are going.  The budget should also be prepared in a format that is used to report to the PCC on a regular basis.

We have a budget, now what?

Now you have your budget approved, check the actual numbers against it on a regular basis (for smaller churches quarterly might suffice if the finances are going as planned). Monitoring actual numbers against the budget and checking differences or variances will help alert you to any issues and enable you to ask questions. For example, have you spent more or less than planned? Have all income and expenses been included?

If the numbers don’t go to plan always remember to look at the church’s priorities and prayerfully discern what action to take.  Always inform others and don’t ignore the problem. At the end of the year any surplus, the money ‘left­over’, forms your unrestricted reserves.

Further guidance is available from our friends at Stewardship.org: Financial Planning and Budgeting for Churches.


  • A budget enables us to exercise our duty of care before society and God. It is a focus of faithful stewardship, gratitude and accountability.
  • The responsibility for the budget belongs legally and spiritually to the PCC as Trustees.
  • If we don’t plan or plan without allocating resources, then we face potential ridicule and decline.
  • Ultimately we cannot invite people to give generously if we have no idea of the cost of ministry.

Finally, if your church doesn’t have a standard financial accounting package with a module for budgeting, below is a excel spreadsheet template. The templates can be used for headline budgeting or more detailed and longer term planning as needed.

Excel Budget Template

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