It’s easy for your church’s budget to start leaking money.
Like anything in life, if you don’t regularly monitor your church’s finances, your church’s budget will begin to drift. In other words, you’ll end up wasting money or overspending money.
To help your church avoid wasting money, here are four essential areas in your budget you’ll need to keep an eye on to make sure you’re stewarding your financial resources well.
Staffing costs will be the most significant expense for your church.
According to AG Financial Solutions, your personnel costs should range between 33-45% of your total church budget.
How does your church’s budget compare to this benchmark?
Do your staffing costs occupy less than 33% of your church's budget? If so, then you have room to grow by adding new staff members, increasing salaries, or you can maintain things as they are.
Do your staffing costs exceed 45% of your church’s budget? If so, then it may be time to reevaluate your personnel budget.
Now, before you get overtly anxious, I’m not talking about letting people go just for the sake of saving money. In certain situations, this may be necessary. But I can’t say whether or not that’s the case for your church sitting at my computer writing this post.
As you do evaluate your personnel costs, here are a few things to keep in mind:
- Review your staffing expenses every year at a minimum
- Evaluate vacated positions to see if you need to rehire someone
- Consider hiring contract workers for specific projects or virtual assistants
- Leverage volunteers to help with the work of your ministry
- Make sure your staffing reflects what’s best for your church
One last thought about staffing:
If your staffing costs exceed 45%, don’t do anything drastic without involving your leadership, seeking counsel, read Bible verses about making decisions, and pray.
#2. Building and facilities
The second largest line item in your budget is your building and facilities.
Referring back to the budget benchmarks observed by AG Financial Solutions, the money you spend on your facilities—including, utilities, insurance, telephone, Internet, and repairs—should range between 25-30% of your church’s budget.
If you spend more than 30% of your church’s budget on your occupancy costs, there’s a good chance you’re wasting money.
Before you decide to sell your building, find a less expensive lease, or turn off your telephone services, there are several ways you can reduce costs, including:
- Reduce your property insurance or renters insurance premium
- Reduce your phone (including mobile) services or ask for a reduced rate
- Increase your thermostat during the summer
- Decrease your thermostat during the winter
- Use programmable thermostats
- Replace inefficient light bulbs
- Replace your windows
- Examine your appliances and HVAC system
- Consider refinancing your church’s mortgage
- Reduce your rent or locate to a less expensive option
From how much you spend on utilities and insurance to your church’s mortgage or rent, this list of steps will help you to get started with saving your church money.
#3. Office expenses
Another significant expenditure for your church are your office expenses.
As a line item in your budget, your office expenses shouldn’t exceed 10% of your budget.
Beneath this umbrella of expenses includes:
- Office equipment
If I were a gambling man, I’d wager you spend more on printing than you realize.
There’s a good chance your church literally prints a ton of paper.
Think about every document you send to your printer:
- Sermon notes
- Meeting agendas
- And… bulletins
I understand bulletins are a sacred cow for many churches, and I also appreciate that many churches use bulletins as a guide to their worship service liturgy.
I’m not saying you need to erase printing bulletins as an expense in your budget. But it would be a good idea to ask yourself these questions:
- How much are we currently spending on printing bulletins?
- Has this expense increased or decreased over the years?
- How can we reduce this cost—e.g., color versus black and white?
- Can we limit the number of bulletins we print?
- Can we integrate digital elements to supplement or replace bulletins?
You may not have a problem with spending excessive amounts of money on printing church bulletins. But are there other line items in your office expenses you can evaluate to see if you can reduce your costs?
How much money does your church spend on advertising?
If your church has been in existence for several years, then there’s a good chance you’re wasting money on your advertising.
Do you spend money on…
Advertisements in your local paper?
Local outreach events?
For some forms of advertisement, such as direct mailers and events, you’ll incur significant costs.
Now, on the one hand, if you’re reaching people with your promotions, and you can justify the costs, then spend away. On the other hand, if the money you spend on marketing is not leading new people to connect with your church, then you need to reconsider your plans.
Whether you’re evaluating your marketing efforts or you’re just getting started, one of the most cost-effective ways you can reach people in your community is with Facebook Ads.
On Facebook, you can reach people in your community, make new connections, and draw people into your worship services for as little as $100.
Don’t believe me?
Brady Shearer of Pro Church Tools shares how one church of 150 spent $109 on Facebook Ads and got 241 new visitors. This is just one example among many testifying to the power of Facebook Ads.
Over to you
Do you have a leaky church budget?
Are you wasting money or overspending in other areas?
Take the time to review these line items in your budget:
- Building and facilities
- Office expenses
If you haven’t evaluated your church’s budget in quite some time, you’ll be able to identify ways you can save money by looking at these four areas with a fine tooth comb.