Heresy! How can someone in the Christian financial world dare go against Dave Ramsey? Before you grab the pitchforks and torches to storm the castle, let me explain. In 2012 our church did not offer formal financial counseling. When someone needed help, I invested my time and helped them figure out their income and expenses and how to get out of their mess. As you can see, that method is not exactly scalable. Then a lovely couple came to our church from Saddleback and told me about a program they led called FPU (Financial Peace University). It sounded like a great program. It gave people solid financial help, and it was scalable. Because this was something I wanted to implement in our church, I needed to take the course. It was so much more than envelopes and cutting up credit cards. It systematically laid out a plan to get people out of debt, stay out of debt, and win with money. If all that is true (and it is), then why do I disagree with Dave?
Dave’s Zero-Based Budget
If someone were to ask me, what is the key to FPU, I would say it is the budget. Dave quotes John Maxell that “a budget is telling your money where to go, instead of wondering where it went.” The truth is, this simple solution is super effective. When my wife and I attended FPU, it took us about three months before we started to get a good handle on our budget, but instead of being restricted and restrained, we felt like we received a raise. But, Dave’s Every Dollar Budget system teaches that “Zero-based budgeting is when your income minus your expenses equals zero.” That is not the true definition of a zero-based budget.
The Problem with Dave’s Zero-Based Budget
Ramsey Solutions focuses on the income less the expenses must equal zero, instead of showing that a zero-based budget begins with zero. A zero-based budget assumes nothing. A zero-based budget starts with a clean slate. In fact, as an avid user of the Every Dollar Budget, I know that Ramsey’s software copies the prior month’s budget into the next month. While copying the previous month’s budget may seem convenient, it has drawbacks. The concept of a zero-based budget is to start with a blank slate because each month is different. For example, utility bills fluctuate each month depending on the season. Copying and pasting a prior month misses the mark and promotes lazy budgeting.
Zero-Based Church Budgeting
Because zero-based budgets are so effective, I recommend that churches use this same methodology. The difference, of course, is the complexity of building an annual zero-based budget with a team. But the benefits far outweigh the time spent starting each year at zero.
Ramsey Solutions’ zero-based budget is an amazingly effective tool for personal finances. In 2012 my wife and I bought into the FPU system hook, line, and sinker. We follow the baby steps and have led countless FPU courses at our church; a few of them had over 100 people in attendance. I have seen, first-hand, how FPU changes lives. The program works. But, a zero-based budget is more than an exercise that ensures that the income, less the expenses, equals zero. It means starting at zero with each budget, avoiding the temptation to copy and paste. To analyze what is different in the income and expense this month. The good news is that you can apply that same mentality to building a church budget and reap the benefits of a zero-based budget.