Building a Church Budget Without Starting From Scratch

September is a great time to start thinking about next year’s budget.

By now, you have something incredibly valuable that you didn’t have a few months ago: real numbers from most of the current year.

Instead of starting with a blank spreadsheet and asking, “What should we budget for next year?” start with what you already know.

Ask better questions:

• What is our giving actually doing?
• Which expenses are trending up or down?
• Are there seasonal patterns we need to account for?
• Are our current spending levels sustainable?
• Which expenses are one-time or unusual and shouldn't automatically carry forward?
• What should we carry forward into next year?
• Where do we need to make intentional changes rather than simply projecting the past?

That’s the philosophy behind our Church Budgeting Tool.

Start With What You Know

A budget shouldn't be built entirely from assumptions. Your year-to-date actuals give you a starting point based on what is actually happening in your church.

By the end of September, you typically have nine months of actual income and expenses. That gives you a much better picture of your church's current financial activity than you had when the year began.

But actuals alone don't tell the whole story. You also need to consider what is likely to happen during the remaining months of the year.

Will giving remain consistent? Are there expenses that happen later in the year? Is December typically different from the rest of the year? Are there changes already planned that won't show up in your current-year numbers?

This is where forecasting becomes incredibly useful.

Forecasting Isn't Guessing

Forecasting simply means using the information you have today to make a reasonable estimate about what the full year may look like.

The goal isn't to predict the future perfectly.

The goal is to create a reasonable, informed starting point for building your next budget.

Our Church Budgeting Tool gives you three ways to approach that forecast.

1. Actuals + Existing Budget

If your current budget is still a good representation of what you expect to happen during the remaining months of the year, you can combine your year-to-date actuals with your remaining budget.

For example, if you have nine months of actual income and a budget for the remaining three months, you can use those numbers together to estimate where you may finish the year.

This approach can be especially helpful when your church's current budget is still closely aligned with reality.

But don't automatically assume that it is.

Take a look at your actuals compared to budget first. If you're significantly ahead or behind budget, ask why.

2. Actuals + Average

Another approach is to use your year-to-date actuals to calculate an average monthly amount and use that average to project the remaining months.

For example, if your church has received $900,000 over nine months, your average monthly income would be $100,000.

You could then use that average to estimate the remaining months.

This approach can be useful for categories that are relatively consistent throughout the year.

However, averages aren't appropriate for everything.

A church may have expenses that occur only once or twice a year, seasonal giving patterns, annual events, or other expenses that don't happen evenly each month.

The math may be simple, but the judgment still matters.

3. Actuals + Average + December Multiplier

Church finances don't always follow a perfectly even monthly pattern.

December, in particular, can look very different from other months because of year-end giving and other seasonal activity.

That's why the third approach in our tool allows you to account for a historical December pattern rather than simply assuming December will equal the average of the other months.

Looking at your church's historical giving can help you determine whether December typically runs above or below the rest of the year.

This doesn't mean December will always repeat the past. It simply gives you another piece of information to consider when creating your forecast.

Don't Let the Formula Make the Decision

A formula can calculate an average, annualize an expense, or apply a historical multiplier but it can't tell you why the numbers changed.

That's where leadership comes in. Ask questions like:

• Is this a permanent or one-time change?
• Did staffing or ministry plans change?
• Are there upcoming expenses not reflected yet?
• What's driving giving ahead of or behind budget?

The goal isn't just to produce a number. It's to understand the number.

From Forecast to 2027 Budget

Once you've created a reasonable forecast, you have a much better starting point for your 2027 budget. But your budget shouldn't simply copy that forecast forward.

This is where the planning begins. Consider:

• What ministries or staffing plans are changing?
• What new initiatives or capital projects are planned?
• What expenses should increase, decrease, or be eliminated?
• Does projected income support the plans you're making?

Your forecast helps you understand where you're headed. Your budget helps you decide where you're going.

A Budget Is More Than a Spreadsheet

A good church budget isn't simply last year's numbers with a percentage increase. It should reflect your church's current financial reality, leadership priorities, and ministry plans.

Start with the numbers. Look at the trends. Ask the questions. Then build the budget intentionally.

Ready to Start?

Download the Church Budgeting Tool

Note: The budgeting tool and instructional videos use the dates from the original examples. Simply update the dates and months to reflect your church's current budgeting cycle.

Need another set of eyes? Church Central Office is here to help - no judgment, just good questions and church-specific financial guidance.