If you want to gain total control of your money you’ll need an effective budget.
Some people are afraid of budgeting for fear of restriction. My wife and I have actually discovered that a budget is freeing. Thanks to budgeting we know we’re hitting our biggest goals: giving to causes we care about, investing for our future, and taking care of our family today.
Pastor Finances Are Unique
As a pastor, or an ordained minister, your household budget needs are unique. In the U.S. we have this wonderful blessing known as the minister’s housing allowance.
If utilized correctly a pastor can pay some of the lowest federal taxes in America. However, it also makes income taxes uniquely difficult. If you’re newly ordained it’s more important to track your expenses now than ever before.
I’ve read a lot of advice on budget categories over the years. One day I realized a budget for my personal finances should be just that – personal. For that reason I’ve tailored my personal household budget to fit the life of a pastor.
Our Family Budget Categories
What you’ll see below are my current household budget categories. I’ve come to this point after a lot of trial and error. Hope this is helpful as you and your family set and hit goals.
Please feel free to use and adjust this for you needs.
This master category needs to be first. If it’s not prioritized it won’t happen. It should go without saying, but yes, even if you’re on staff at your church you should tithe.
- Tithe (10% on the gross to your local church)
- Generosity (or offerings)
Again, this master category needs to be near the top of your budget so it doesn’t get skipped.
If you’re in a position where saving and investing is currently unattainable, be sure to prioritize food, shelter, clothing and transportation over this. Take care of your family today before tomorrow.
If you can afford to do this though, these are my recommendations.
- Roth IRA (husband)
- Roth IRA (wife)
- 529 Plan (one per child)
- Future Vehicle Savings
- Emergency Fund (3-6 months of survival expenses)
Some families combine household supplies with groceries. I say only food.
Housing Allowance Expenses
This master category is for any and every expense that qualifies for the Minister’s Housing Allowance.
- Mortgage + Escrow (or rent)
- Property, Personal, School Taxes
- House Repair + Maitenance
- House Improvements (major construction)
- Landscaping + Yard Maintenance (this cannot include paid services)
- Furnishings + Appliances
- Natural Gas
- Cable + Internet
- Home Office
- Supplies + Goods
Unfortunately the housing allowance does have limitations. One of those limitations is toilet paper. We have a toiletries category to cover all consumables from the bathroom…and diapers.
- Hair Care
- Repair + Maintenance
- Legal (inspection, licensing, etc.)
- Auto Insurance
- Health Insurance (or health share, we are members of Samaritan Ministries)
- Out-of-Pocket Treatment
- Life Insurance
- Professional Fees
- Income Taxes
- YNAB (budgeting software subscription)
- Pocket Money
- Cell Phone
This is for any further professional growth. Local college, online, etc.
This category is for any non-ministry work a pastor is doing with the intent of making money. My assumption is that early on in the process when the side hustle isn’t generating revenue, like for me on CheerfulMoney.com, you’ll be funding it out of your personal family checking.
- Online Business
- Physical Business
Budgeting on a regular basis takes time commitment. There is no doubt about that. The time commitment lessens as you get better at it, and the results are completely worth it.
I’ve mentioned You Need A Budget (YNAB) a couple times in this article. It truly is the best budgeting software I’ve ever experienced. They’re methods of giving every dollar a job as it comes in rather than as a predicted income, and their method of living on last month’s income have both been invaluable for our finances. Uh-huh moments for me.
I highly recommend you give their free 34 day trial a try. If it’s not for you no big deal. Maybe a spreadsheet, other software or pen and paper are your preferred methods. As long as you’re budgeting you’re doing well.
One of the initial steps if you’d like to start generously sharing God’s blessings is to take control of your money. Budgeting is how you do that. YNAB can help.
Enjoy the process! Hope this has been helpful.
Any questions or suggestions or experiences you’d like to share?