Budgeting

Making It Easier > Processes > Finances > Budgeting

The Church budget is our mission and ministry in numbers.

A cynic once observed that a budget is just a way of worrying before you spend money as well as afterwards!That may explain why so many churches (and so many households) don't have a budget or, in some cases, why the budget is the private preserve of the treasurer rather than a tool for the trustees. The reality is that a church budget is a vital piece of planning and a key trustee responsibility. The budget is more than a tool for planning and controlling expenditure, it is your church's mission expressed in numbers.

Preparing a basic budget is not hard but its purpose is far from simple. At worst a church budget, however accurate, will do no more than recreate yesterday. It will capture yesterday's life at today's prices while asking more for tomorrow to do the same as yesterday is not appealing. Only a budget that captures a vision for the future will help to generate serious congregational giving. Your budget is where the rubber hits the road, where the priorities of your church are made clear. It lays out the financial targets for the coming year: how much do we need to fulfil our mission and ministry?
Creating your budget
For a PCC the budget is a prediction, a 'best, informed guess', as to how much money the church might receive in donations and fees, along with how much money the church is likely to spend to fulfil its plans for ministry in the congregation and wider community within the coming year.

The starting point for each year's budget will be the accounts from the immediately previous years, usually in summary form - a good summary to use is your annual Return of Parish Finance document.  Simply entering the accounts from previous years into the provided templates will provide a 'first pass' or 'stand still' budget.

Fortunately the Gospel isn't about 'standing still' and so to complete your budget, the costs of (and expected income from) any new mission initatives or community projects will also need to be added to the budget templates and the mathematical predictions sense-checked. We offer two budgeting templates  to help parishes.



A Simple Budget
The simple budget template uses only two previous years to make its predictions. As next year's budget is often created near the end of the (unfinished) current year, normally these two years would be the last full completed year's accounts and a best guess for the current unfinished year's acounts. This simple budget is ideal as a starting point for churches that have never budgeted or not confident working with numbers. It is available as an Excel spreadsheet from the Giving in Grace website.



Least Squares Budget
This sounds more complex than it is! The Least Squares Budget template uses three previous years to make a mathematical prediction, on a straight line basis, what the future might look like. In this prediction the previous years do not all have to be consecutive; they just need to be fairly typical for your church. In addition the prediction year does not have to be the immediately following year. The template contains detailed guidance on entering data into the Excel spreadsheet.

Managing our Money

Links

Giving in Grace
Simple Church Budget

Uses three historical years
Least Squares Budget template

Contacts

For guidance in creating your Church's Budget, contact Cath or Gordon.
0151 705 2180

cath.gaskell@liverpool.anglican.org
gordon.fath@liverpool.anglican.org