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  • Writer's picturePaul Rice

Why Church Budgeting Stresses You Out

Updated: Nov 14, 2021

By Paul Rice

In the great state of Texas (I’ve probably already offended someone…), our main roads are pretty good. However, all of that comes at a cost: perpetual road construction. And road construction means traffic jams.

The construction-induced traffic jams on I-35 are legendary. I’m convinced the construction planning meetings go something like, “I-35 has 5 lanes and we’re working on the far right lane. We’ll need plenty of space. Let’s close off four lanes during rush hour, just to be safe.”

The result? A 10 mile long line of cars, moving about 10 feet every 2 minutes. It’s difficult to change lanes because everyone is packed in like sardines. It’s nearly impossible to exit the highway because your exit is probably closed for construction too.

Now, imagine you are stuck in that traffic jam and your fuel tank is almost empty. How do you feel in that moment? Stressed?

That feeling, at its core, is a desire to survive. All humans are wired with it. You don’t want your car to get stranded on the highway. You’re worried about the cost of a tow truck. Worst of all, you’ll be responsible for blocking the highway and you’ll probably end up on YouTube.

That’s exactly what a budget without margin feels like. Stressful.

You might feel the same way about your church’s budget. Progress towards your goals is slow. Small course corrections are difficult. Changing course completely is nearly impossible.

Let’s return to our traffic jam. Imagine you are still stuck, but you remember that a spare gas can full of fuel is in your trunk. How do you feel now? Pretty relieved, right?

That’s the power of margin.

What is Margin?

Simply put, margin is a little more.

In a traffic jam, margin is a little more gas on hand. In a budget, margin is a little more money.

Budgets of any size require margin to work effectively. However, many organizations don’t put enough thought into what kind of margin they build into their budgets. Extra money may be sitting in a side account, but it doesn’t mean that money is working to advance your mission.

As church leaders, we must be intentional about how we build and use margin in our budgets to drive our mission forward.

In the next few posts, we will learn about the two types of margin in a budget and how to use them. We will also explore how to create more margin in our budgets.

Survival Margin

The first type of margin is called “Survival” margin. Survival margin is the extra fuel that helps an organization, well… survive.

The desire for survival is inherent in organizational leadership. We don’t want the venture to fail. Having survival margin in the budget ensures the organization will keep running when things get tough.

Organizations that are even remotely finance-savvy will implement some form of survival margin in their budgets. Survival margin looks like:

  • Emergency funds

  • Planning for facility or equipment maintenance

  • Setting a spending limit

  • Eliminating debt

Having survival margin significantly increases a church’s chances of surviving even the toughest times. Many churches gained a fresh appreciation for survival margin during the COVID lockdown.

The Barna Group reported that 64% of churches saw a decline in giving during the initial stages of COVID lockdown. Churches with sufficient survival margin (emergency funds, no debt, etc…) were able to cover their operating costs and continue ministering, even if ministry looked a little different. Churches without sufficient margin either closed or struggled to stay afloat, requiring external assistance to do so.

Establishing a good financial foundation with survival margin is absolutely critical. It’s easy to see the stress relief that survival margin brings during circumstances like COVID. Survival margin allows an organization to press forward, no matter the situation.

Let’s talk practical application.


Application #1: Start building survival margin NOW!

If your church hasn’t been proactive at establishing survival margin, connect with your board, financial team, or group responsible for the church’s finances ASAP. Rework your budget to incorporate at least the following forms of survival margin:

  • Money toward an emergency fund every month. Target at least 1 month of operating expenses as a starting point.

  • Keep at least 1 month’s operating expenses in the checking account at all times. Without cash in the bank, any organization will collapse under its own weight. Adjust your spending to keep that checking account full.

Application #2: Start building survival margin for the long term.

  • Plan ahead for building maintenance. I cannot stress this enough. Set aside at least some money even if you think you won’t need it. Trust me, you will.

  • Eliminate any and all debt. Yes, even building debt! This will most likely require sacrificing some non-essential expenses, but you will thank yourself the next time a big emergency comes around.

Survival margin may be critical for a church to stay afloat, but a church will never advance its mission on survival margin alone.

Survival margin is inflexible, meant to be saved and spent only when absolutely necessary. Advancing your mission requires trying new ideas, and that means spending money.

In the next post, we will discuss the second type of margin and why you might have to change your perspective on money to advance your church’s mission.


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