6 Ways to Maximize Your Budgeting Process

Some people believe a budgeting process is a waste of time. I don’t mean the people who have a visceral reaction to budgets and strategy, but there are prudent and wise leaders who view a long budgeting process as bad stewardship. They say things like:

We don’t even know how this year will end.

“We are using this year as a starter for next year, and this year’s story is still being written” is not an unwise or untrue statement.

My budget is irrelevant the first day.

Because things are changing, this is true. Budgets are based on a forecast of the future, and financial forecasters even articulate that the first rule of forecasting is that they are wrong. So why in the world would one invest inordinate amounts of time in a budgeting process?

I agree with their sentiment. A long and complex budgeting process with layers and layers of meetings and communication is overdone and a waste of important time. But before you go overboard with that statement, understand that I am not willing to abandon the budgeting process all together. Instead, I would rather maximize it, make it fruitful, and ensure it is helpful to the team. Here are some thoughts on how not to waste your budgeting process:

1. Start with mission and strategy.

Jack Welch declared that strategy is merely resource allocation, meaning a budget is really a reflection of your strategy. It shows what you value and where you are putting emphasis and focus. Connect any strategic planning you do to your budgeting process. Disconnecting strategic planning from budget planning is not wise. Make budgeting about strategy, not finances.

2. Identify the biggest opportunities for growth and impact.

As you plan, look for the biggest opportunities for growth. Set goals in connection with those opportunities, and plan to finance the biggest opportunities generously.

3. Find waste and re-invest it.

If you and the team have gotten stronger, there is always new waste to pull out of the spending. If you use the budgeting time to uncover expenses that could be better used elsewhere, you are often able to finance the big opportunities. Budgeting lesson: Take funds from what is less fruitful to fund what could be more fruitful. To do that, you must read the next item:

4. Don’t straight-line.

A common mistake in budgeting is to take what you are currently spending in a category and project that for the next year (called straight-lining). Basically, current expenses are copied and pasted as next year’s expenses. But there may be some unwise spending and waste within the category. If you straight-line, you may be straight-lining bad stewardship.

5. Use the time to learn and re-learn.

I learn something new every budgeting cycle. Because people are focused on the type of questions that budgeting raises, the conversations are quick and helpful. Approach budgeting time as a time to learn and re-learn how resources are allocated in light of your strategy.

6. Form a contingency plan.

For the last decade, I have used budgeting to form growth plans. But I have also learned to use that time, the time when everyone is looking deeply into the finances, to form a contingency plan. What will we do if we need to cut 10% from our budget? The plans can be high-level and even on just one page, but I would rather think about a challenging scenario before the chaos of the scenario hits. File the plan away and hopefully you will never need it.

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Eric Geiger

Eric Geiger serves as the Vice President of the Church Resource Division at LifeWay Christian Resources. Eric received his doctorate in leadership and church ministry from Southern Seminary. He is also a teaching pastor and a frequent speaker and consultant on church mission and strategy. Eric authored or co-authored several books including the best selling church leadership book, Simple Church. Eric is married to Kaye, and they have two daughters: Eden and Evie. During his free time, Eric enjoys dating his wife, playing with his daughters, and shooting basketball.

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comment_post_ID); ?> I am a senior citizen who has lived in many areas of the US, the farthest south being Virginia DC area. There are several church plants in the area--some failed, some doing well. One of the sadist failures was a plant in NW Washington near a large Presbyterian Church (I had been an elder in the church, so I knew the area) where changes in church doctrine was driving many away from the PCUSA churches. There were many mature Christians who lived in the area who were very willing to participate and give generously to the church. Its failure was a loss. The pastor and his wife lived in a VA suburb, wanted something that would appeal to their tastes, which included "praise music". There was a professional piano teacher and several people who had sung in choirs in the area. Their suggestions were completely ignored. Forget that there was joyous participation in singing hymns and silence by many for the praise music. The experienced church leaders that were attending were expected to seek the wisdom of the pastor who did not live in the area rather than have any role in leadership. There is another church plant in Northern Virginia that seems to be going the same way. My take: the pastors should get past their high-school and college days culture and get to know and appreciate the people of the community. Do not try to reproduce Intervarsity or Campus Crusade. Hymns are not a sin and "uneducated" (never graduated from college) should not be ignored as uninformed or stupid. People who have served in and/or live in the area are needed in leadership and not just to serve coffee and give. We all need to pray together and serve God in the community in which there is to be a plant. Glenna Hendricks
— Glenna Hendricks
comment_post_ID); ?> I like it Mac and do agree with your opinions on the matter. Thanks much
— winston
comment_post_ID); ?> In this era, we have the opportunity of professional church staff today who utilize their gifting to shape the image and atmosphere of the church organization. But the 100% real impact on the church visitors is genuine evidence of changed lives by the gospel and the active growing discipleship (just as it was in the first century church). One demonstration is financially rich believers ministering equally together with poor believers (how odd, and incredibly miraculous; all humble and bow at the foot of the cross.). It is the awesome contrast of church members vocations, race, gender, age, maturity, gifting, humility that demonstrates to visitors "there is a Spirit in the place". That first-time guest list of 10 are "physical excuses", not spiritual excuses. Those don't tell the story. The condition of facilities and publicly greeting people have zero to do with it. The power of God in and through believers lives dedicated to impact other people with their relationship bridge-building of acceptance of the lost around them. Empowered believers are infectious, loving, helpful, giving, self-less, dynamic, compelling, bold, Christ-filled. As I have been in many church settings domestically and internationally, the facilities can be poor, and yet the fellowship can still be rich. We need to operate with first church humility. People come to Christ on His terms, not on our human abilities of hospitality. A huge catastrophe in a community, disaster relief brings lots of people into churches – many come to the church in those terrible conditions no matter the physical condition of the local church. Off the condition of facility, and onto the condition of God's people (living stones).... and everything else will grow.... and the other physical issues will be corrected by the staff.
— Russ Wright

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