Dear Dave,
I pastor a small church that is debt-free. I’d like for us to save an emergency fund for the church, but I’m not sure what would be considered an expense. Can you help?
David
Dear David,
In terms of mathematics, I would advise looking at it the same way you would a small business. The goal, first and foremost, is to keep the doors open in case something bad happens. The secondary goal could be to pay bills on time for the sake of the church’s reputation, and the third goal would be to do all this without putting a strain on the organization. In business, we would call this fund “retained earnings.” Technically, a church doesn’t have earnings, but they do have income. You’ll want to retain some of that on a regular monthly basis.
For a church, basic things like payroll, utilities, insurance and taxes would need to be covered under an emergency fund. Coffee and donuts, new hymnals, and mission trips aren’t necessities. You should already be running a monthly and annual budget on the church, so separate the necessities per month and multiply that by a three to six month figure.
There’s a huge level of wisdom involved in a church being debt-free, David. Congratulations!
— Dave
* Dave Ramsey is America’s trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven best-selling books. The Dave Ramsey Show is heard by more than 11 million listeners each week on more than 550 radio stations and digital outlets. Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.
