By Brent Lacy

Most small churches do not need sophisticated accounting software. They need a simple, honest budget that tells them where the money comes from, where it goes, and whether they are living within their means. A good church budget is not complicated. It is a statement of priorities.

The Simple Small Church Budget Framework

Income

• Tithes and offerings (regular giving)
• Special offerings (designated giving)
• Facility rental or other income

Expenses

• Personnel (40-60%): Pastor salary, housing allowance, benefits, and any other staff
• Facilities (15-25%): Mortgage or rent, utilities, maintenance, insurance
• Ministry (10-15%): Programs, curriculum, supplies, events
• Missions (5-15%): Local and global giving beyond the congregation
• Administration (5-10%): Office supplies, technology, insurance, legal
• Reserve (5-10%): Building toward a 3-month operating reserve

Free Budget Template Options

Google Sheets (free)

Google Sheets is the best free option for most small churches. It is accessible from any device, automatically saves, can be shared with the treasurer and board, and has basic formula functions for totals and percentages. Search “church budget template” in Google Sheets templates for a starting point.

Microsoft Excel

If your church already uses Microsoft Office, Excel works well. Search for “church budget template” in the Excel template library.

Wave Accounting (free)

Wave is a free accounting software that handles income, expenses, and basic financial reporting. It is more sophisticated than a spreadsheet and produces professional financial reports. It is free for the core features that most small churches need.

The Most Common Small Church Budget Mistakes

• Spending more than you receive. Build the budget on actual income, not projected income.
• No reserve fund. A church with no reserve is one bad month away from a crisis. Build toward 3 months of operating expenses.
• Allocating nothing to missions. A church that gives nothing beyond its own walls is missing a core expression of the gospel.
• Underpaying the pastor. The most common form of financial injustice in small churches. Review pastoral compensation annually.
• Not reviewing monthly. A budget reviewed only at year-end is not a management tool.

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