I know — it feels like we just wrapped up the 2025 budget! But believe it or not, it’s already time to start planning for 2026. Getting an early start helps you avoid surprises, gives your board or finance team time to review numbers carefully, and ensures your church starts the new year on solid financial footing.
Let’s walk through a few key areas you’ll want to take a close look at this year:
1. Payroll: Plan for a Modest Increase
The Social Security Administration’s Cost of Living Adjustment (COLA) for 2026 is expected to come in around 2.5%. Many churches are using that figure as a guide for staff raises this year. It’s not a huge bump, but it helps your team keep up with inflation and shows that you value their ministry and hard work.
Even a small increase can make a big difference in morale and retention — and it’s much easier to plan for now than to scramble for it later.
Pro-tip: Pay a small cost of living increase and offer a bonus for a job well done. Pay increases are hard to take back when finances are tight or performance isn’t what it should be. Time off with pay is also a great reward when a raise is not a financial option.
2. Property Insurance: Brace for a Jump
This one might sting a little. Most churches are seeing 5-10% increases in property insurance premiums. Before you lock in your budget, reach out to your agent for an updated quote. Prices can vary widely depending on your region, claim history, and coverage type, so don’t rely on last year’s bill.
Also, this might be a good time to review your coverage levels. Make sure you’re insured for current property values — not just what things cost five years ago.
Pro-tip: Budget for emergency repairs so that you can avoid submitting insurance claims. Example: Pay to repair a frozen water pipe instead of filing an claim. Excessive claims can drive up rates or lead to cancellation.
3. Medical Insurance: Expect Similar Increases
If your church provides medical insurance for staff, you’ll likely see the same pattern — 10–20% increases are common right now. Get firm numbers from your provider as early as possible so you can adjust your budget accordingly.
And if you’re shopping plans or considering a cost-sharing option, build in extra time for research and board approval.
Pro-tip: Many churches have moved to paying staff a stipend towards health coverage. Staff then finds coverage on their own. This option does increase the taxable income of staff but makes controlling the expense much easier for the church.
4. Utilities: Modest but Steady Increases
Electricity, gas, and water costs continue to creep up slowly. Most churches can expect 3–5% increases depending on the provider. While that’s not huge, it adds up — especially if your building is large or heavily used during the week.
This might also be a good time to look at energy-saving projects, like LED lighting or programmable thermostats, which can help offset those rising costs.
Pro-tip: Check with your utility provider for rebate and assistance programs for things like LED light conversions or programable thermostats. Many will also provide a free walk-through of your facilities to discuss energy-saving options.
5. Everything Else: Inflation Still Matters
For your general ministry expenses — curriculum, supplies, maintenance, and outreach — plan for inflation to hover around 2.5–3%. It’s not as high as a couple of years ago, but it’s still enough to make a difference in your purchasing power.
Pro-tip: Ask your suppliers to always make you aware of cost increases BEFORE they go into effect. Stock up on items that are going to increase if you have the funds and space to do so.
Bottom Line: Don’t Wait
The best budgets aren’t built in a rush. Starting early lets you gather accurate numbers, pray through priorities, and make thoughtful decisions. It also gives your finance team time to communicate any changes to ministry leaders before year-end.
So grab your calculator (or your spreadsheet), pour a cup of coffee, and start those 2026 conversations now. Your future self — and your church — will thank you.