The average church in America today has only one full-time pastor. This leaves the pastor to handle the majority of the church's duties, including business matters. In referencing the qualifications for a pastor, 1 Timothy 3:4 says the leader should be one who rules his own house well. What does this mean? It means the pastor must manage his own family correctly, in a commendable way that leaves no room for blame.
The point continues with this rhetorical question: "If a man does not know how to rule his own house, how will he take care of the church of God?" (1 Tim. 3:5, NKJV). The answer is, he can't. Ministers must be able to manage their own financial affairs in a God-pleasing manner.
Many important aspects are involved with the handling of business and financial matters. It is crucial that a pastor be able to conduct business in town, pay taxes, pay bills, and so on. The most basic part of your home's business is a budget. Here are some ideas for creating and implementing one.
Plan your spending ratio
Before jumping into creating a budget, let's quickly touch on spending ratios. People often ask about spending ratios and the answer depends on the situation.
For example, housing expenses should not exceed 30 percent to 35 percent of your budget. But if your house is paid for, you can reduce that percentage to account only for upkeep, insurance, property taxes, and renovations.
The percentages below are best used in consideration of the average household income of $48,000 per year after taxes. The percentages should be adjusted accordingly if your annual income is higher or lower than $48,000:
- 10 percent to 15 percent for church offering
- 30 percent to 35 percent for mortgage (less if renting, house is paid for, or a housing allowance is involved)
- 15 percent for transportation (including upkeep and maintenance)
- 10 percent for food (including eating out)
- 20 percent for monthly bills
- 5 percent for miscellaneous bills (including emergencies)
- 5 percent for savings
Write down and review all expenses. Then you can see if any category is way out of line, according to these spending ratios.
Host an annual family business meeting
Consider a family business meeting at least once a year. It is interactive, educational, and healthy for the entire family. It produces a budget that the whole family agrees to and can adhere to.
Jesus did not discuss what mix of stocks and bonds to own, how to reduce taxes, or how much income to save for retirement, but he had a lot to say about finances. He dealt with foundational topics, such as giving, greed, and priorities. Jesus did not shy away from these topics, and neither should we. The family business meeting provides the perfect opportunity for such discussions in the context of your family's use of funds and ordering of priorities.
Think through topics, such as weekly, monthly, and annual budgets and family plans. Discuss longer term needs and expenses, such as weddings, funerals, retreats, braces, college, and the like. Start with the money you earn in each paycheck and lay out the details of each expense, while making every attempt not to miss a single item from each individual in your family. This discussion should lead to a written budget and give the family a "game plan."
Create a budget
Record everything on paper or your computer to make a budget. Keep in mind that the budget will not rule you. Instead, it will allow structure and order in your home in relation to business and financial matters. Create your budget by following these five steps:
Step 1: Write down your monthly bills.
Step 2: Write down your future expenses (including a portion set aside for emergencies).
Step 3: Add Step 1 and Step 2 together to get your total monthly expenses.
Step 4: Write down all of your monthly income amounts and sources to get your total monthly revenue.
Step 5: Compare Step 4 with Step 3.
If your expenses (what you spend) are less than your revenue (what you make), then you have cash left over each month. This is a great place to be, but it may indicate an opportunity to budget better in ways that allow for more giving to charities and ministries when the surplus allows.
If your expenses are equal to revenue, it means you have no money left over each month. This is not a bad place to be, mainly because you are not going into debt each month. But this is living paycheck to paycheck. If your family annual planning and business meetings are done correctly, and you have budgeted all monthly, annual, and long-term expenses, you are doing well. Just keep on living. Do note one potential problem: when inflation rises higher than pay increases, you will need to trim your budget.
If your expenses are more than revenue, then you owe money. This means you are going in the hole each month. Being in debt prevents you from having a balanced budget, building up savings, and accomplishing longer term financial goals.
Tips for cutting costs now
Mortgage: Check for current rates to look at possible refinancing.
Insurance: Most insurance companies give a multipolicy discount (usually up to 10 percent) when you use them for home and auto. Also consider raising your deductible—this lowers monthly rates, although you will pay more of the bill if something goes wrong.
Cable TV: Cable bills easily run from $50 to $100 a month. Get the basic local channels for much cheaper, or use free, legal alternatives, such as video streaming services (e.g., Hulu.com).
Credit cards: If you have credit card debt, many people advise you to first pay off the cards with the highest interest rates. I mostly agree, because you'll pay less in the long run. But if you need to cut expenses quickly, pay off the card with the lowest balance first. This frees up money for other monthly expenses. Once you pay off a credit card, cut it up.
Utility bills: Turn the heat down, run less air conditioning, and make sure you keep the lights off when not in use. You can potentially save up to 15 percent each month.
Groceries: Make a list with your week's meals planned out, and shop only for that list. And don't shop when you're hungry.
Unfortunately, many Americans face expenses that are higher than revenue every month. If this is true of you, it requires immediate action.
You must make more money or spend less. If enough cuts cannot be made, you should consider how to increase your revenue. Ask for a raise, work a second job, consider a home business; something must be done.
Discuss possible options with family members too. You may decide that you can downsize your home or autos as an option to save money.
Budgeting takes commitment and determination. Consider scheduling monthly or quarterly family meetings to review any unexpected changes. This keeps communication going and helps family members understand when something has to be cut from the budget later in the year or added to the longer range plan. This will help family members understand that, even if they have to sacrifice something important to them now, they may still get it after other priorities are met.
Consider Your Testimony
When the members of a church, its pastor, or its leaders are past due on bills, it is a poor testimony in the community. Church members leave a witness in their community—good or bad. A positive witness can turn into a bad reflection on the Body of Christ as a whole when professing Christians appear to be poor stewards or undisciplined in their finances. Scriptures are clear for the pastor in these matters, but they are equally clear for all believers.
Adapted fromThe Business Side of Ministryby Michael Nolan (Regular Baptist Books, 2011). Used by permission. All rights to this material are reserved. Material is not to be reproduced, scanned, copied, or distributed in any printed or electronic form without written permission from Regular Baptist Books.
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