Leading Your Church Financially

By Dennis Wiggs

Most young preachers pastor smaller churches, which means that financial policies are often already established. The wise young preacher will attempt few changes at first. He must gain the respect and trust of the congregation. He should set goals for the congregation and try to prepare the way for the next pastor.

Prepare a Budget

Leading members to prepare a budget is the first step to give directions to church finances. I call it a “faith financial guide.” The first budgets should be short, including such essentials as pastor’s provisions, church operation and outreach ministries. Encourage church leaders to reevaluate the financial guide annually.

As the church accepts the advantages of a budget, feel free to make suggestions that certain pastoral provisions be added. For example, the pastor’s travel allowance, medical insurance, social security, retirement, denominational meetings and housing could be added to the budget.

A good method of determining the pastor’s financial provisions is to ask the deacons, church board, or finance committee to write down their total salary anonymously (including benefits). Then average the salary. The average will provide a good standard for the pastor’s total provisions.

Auto Allowance

One of the pastor’s greatest expenses is sustaining an adequate vehicle. The busy pastor may drive 30,000+ miles a year. Much of that mileage occurs when he travels to hospitals, makes visits, participates in denominational meetings, and travels to and from church facilities.

A good method to provide for the pastor’s auto allowance is to determine what the government allows for income tax purposes. Multiply that by the average number of miles the pastor drives annually while transacting church business.

Medical Insurance

Providing medical coverage for the pastor and his family benefits the church as well as the pastor. A caring church wants to provide for the pastor and his family in the event of illness. That can be done through providing adequate medical coverage. Better to pay monthly premiums than for the church to feel obligated to take up large special offerings to help pay off the pastor’s medical bills. Group policies are often available at a discount rate for young pastors.


Help yourself, as well as the next pastor, by establishing a retirement program in the church budget. If you leave the church, this important provision will continue for the next pastor. A monthly contribution to the denominational pension plan grows quickly and painlessly when included in the church budget.

This “forced” retirement plan helps the young preacher prepare for a future that he may not consider now. Contact the Board of Retirement (www.boardofretirement.com) for information about enrolling.

Social Security

Some churches pay at least half the pastor’s social security. Many pay it all. Very few churches could continue to pay the salary of a disabled pastor while employing a new one.

Church Representation

The pastor represents the church in the district, state and national meetings. The budget should include adequate reimbursement in this important category including mileage, food and housing.

Parsonage/Housing Allowance

Churches discuss advantages and disadvantages of owning a parsonage. Many churches provide adequate housing allowance to cover the mortgage, insurance, taxes, utilities and upkeep for their pastor’s own home. A housing allowance allows the pastor to build up equity in a home.

The young preacher who settles in for the long haul may prove to the church the advantage of their providing him a housing allowance. This relieves the church of the responsibility of upkeep for the parsonage.

Exercise Patience

It may take years to establish a workable faith financial guide. The young preacher must exercise much patience and wisdom as he leads his congregation in financial matters. He must not think of just himself. He may not pastor that particular congregation his entire ministry. Therefore, whatever financial suggestions he makes should also keep his successor’s needs in mind.

Most pastors in our denomination are underpaid. Young pastor, if your congregation is not providing a reasonable salary, get on your knees and ask the Lord to meet the need. He may move you to another church or move the leaders in your present church to increase your salary provisions.

About the Writer: Dennis Wiggs retired in 2004 after many years in ministry.

Adapted from Contact magazine, January 1998.