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tzinfo-data

RUBY VERSION
ruby 2.4.1p111
ruby 2.4.4p296

BUNDLED WITH
1.14.6
1.16.1

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---
layout: post
title: "Using Ledger for YNAB-like envelope budgeting"
date: 2018-06-12 21:20:00 +0200
author: Nicolas Petton
categories: ledger emacs ynab budgeting
description: "A quick guide to setup Ledger for envelope budgeting"
---

# Bye bye Elbank

I have to start this post with this: I will not be actively maintaining
[Elbank](https://github.com/NicolasPetton/elbank) anymore, simply because I
switched back to [Ledger](https://www.ledger-cli.org/). If someone wants to
take over, please contact me!

The main reason for switching is budgeting. While Elbank was a cool experiment,
it is not an accounting software, and inherently lacks support for powerful
budgeting.

When I started working on Elbank as a replacement for Ledger, I was looking for
a reporting tool within Emacs that would fetch bank transactions automatically,
so I wouldn't have to enter transactions by hand (this is a seriously tedious
task, and I grew tired of doing it after roughly two years, and finally gave up).

Since then, I learned about ledger-autosync and boobank, which I use to sync my
bank statements with Ledger (more about that in another post).

# YNAB's way of budgeting

I only came across [YNAB](https://ynab.com) recently. While I won't use their
software (being a non-free web application, and, you know... there's no `M-x
ynab`), I think that the principles behind it are really appealing for personal
budgeting. I encourage you to [read more about
it](https://www.youneedabudget.com/method/) (or grab a [copy of the
book](https://www.youneedabudget.com/book-order-now/), it's great), but here's
the idea.

1. **Budget every euro**: Quite simple once you get it. Every single Euro you have
should be in a budget envelope. You should assign a job to every Euro you
earn (that's called
[zero-based](https://en.wikipedia.org/wiki/Zero-based_budgeting), [envelope
system](https://en.wikipedia.org/wiki/Envelope_system)).
2. **Embrace your true expenses**: Plan for larger and less frequent expenses, so
when a yearly bill arrives, or your car breaks down, you'll be covered.
3. **Roll with the punches**: Address overspending as it happens by taking money
overspent from another envelope. As long as you keep budgeting, you're
succeeding.
4. **Age your money**: Spend less than you earn, so your money stays in the bank
account longer. As you do that, the age of your money will grow, and once
you reach the goal of spending money that is at least one month old, you
won't worry about that next bill.
# Implementation in Ledger

I assume that you are familiar with Ledger, but if not I recommend reading its
great
[introduction](https://www.ledger-cli.org/3.0/doc/ledger3.html#Introduction-to-Ledger)
and [tutorial](https://www.ledger-cli.org/3.0/doc/ledger3.html#Ledger-Tutorial).

The implementation in Ledger uses plain double-entry accounting. I took most of
it from
[Sacha](http://sachachua.com/blog/2014/11/keeping-financial-score-ledger/), with
some minor differences.

## Budgeting new money

After each income transaction, I budget the new money:

```
2018-06-12 Employer
Assets:Bank:Checking 1600.00 EUR
Income:Salary -1600.00 EUR

2018-06-12 Budget
[Assets:Budget:Food] 400.00 EUR
[Assets:Budget:Rent] 600.00 EUR
[Assets:Budget:Utilities] 600.00 EUR
[Equity:Budget] -1600.00 EUR
```

Did you notice the square brackets around the accounts of the budget
transaction? It's a feature Ledger calls [virtual
postings](https://www.ledger-cli.org/3.0/doc/ledger3.html#Virtual-postings). These
postings are not considered real, and won't be present in any report that uses
the `--real` flag. This is exactly what we want, since it's a budget allocation
and not a "real" transaction. Therefore we'll use the `--real` flag for all
reports except for our budget report.

## Automatically crediting budget accounts when spending money

Next, we need to credit the budget accounts each time we spend money. Ledger
has another neat feature called [automated
transactions](https://www.ledger-cli.org/3.0/doc/ledger3.html#Automated-Transactions)
for this:

```
= /Expenses/
[Assets:Budget:Unbudgeted] -1.0
[Equity:Budget] 1.0

= /Expenses:Food/
[Assets:Budget:Food] -1.0
[Assets:Budget:Unbudgeted] 1.0
= /Expenses:Rent/
[Assets:Budget:Rent] -1.0
[Assets:Budget:Unbudgeted] 1.0
= /Expenses:Utilities/
[Assets:Budget:Utilities] -1.0
[Assets:Budget:Unbudgeted] 1.0
```

Every expense is taken out of the `Assets:Budget:Unbudgeted` account by default.

This forces me to budget properly, as `Assets:Budget:Unbudgeted` should always
be 0 (if it is not the case I immediately know that there is something wrong
going on).

All other automatic transactions take money out of the
`Assets:Budget:Unbudgeted` account instead of `Equity:Budget` account.

## A Budget report

This is the final piece of the puzzle. Here's the budget report command:

```
ledger --empty -S -T -f ledger.dat bal ^assets:budget
```

If we have the following transactions:

```
2018/06/12 Groceries store
Expenses:Food 123.00 EUR
Assets:Bank:Checking

2018/06/12 Landlord
Expenses:Rent 600.00 EUR
Assets:Bank:Checking

2018/06/12 Internet provider
Expenses:Utilities:Internet 40.00 EUR
Assets:Bank:Checking
```

Here's what the report looks like:

```
837.00 EUR Assets:Budget
560.00 EUR Utilities
277.00 EUR Food
0 Rent
0 Unbudgeted
--------------------
837.00 EUR
```

# Conclusion

Ledger is amazingly powerful, and provides a great framework for YNAB-like
budgeting. In a future post I'll explain how I automatically import my bank
transactions using a mix of `ledger-autosync` and `weboob`.

+ 167
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@@ -1,5 +1,169 @@
<?xml version="1.0" encoding="utf-8"?><feed xmlns="http://www.w3.org/2005/Atom" ><generator uri="https://jekyllrb.com/" version="3.5.1">Jekyll</generator><link href="https://emacs.cafe/feed.xml" rel="self" type="application/atom+xml" /><link href="https://emacs.cafe/" rel="alternate" type="text/html" /><updated>2017-11-30T14:28:48+01:00</updated><id>https://emacs.cafe/</id><title type="html">Emacs café</title><subtitle>A blog about Emacs, mostly focused on JavaScript development, by Nicolas Petton.
</subtitle><entry><title type="html">Introducing Elbank</title><link href="https://emacs.cafe/elbank/emacs/2017/11/30/elbank-intro.html" rel="alternate" type="text/html" title="Introducing Elbank" /><published>2017-11-30T14:28:00+01:00</published><updated>2017-11-30T14:28:00+01:00</updated><id>https://emacs.cafe/elbank/emacs/2017/11/30/elbank-intro</id><content type="html" xml:base="https://emacs.cafe/elbank/emacs/2017/11/30/elbank-intro.html">&lt;p&gt;&lt;a href=&quot;https://github.com/NicolasPetton/elbank&quot;&gt;Elbank&lt;/a&gt; is a new Emacs package I’ve
<?xml version="1.0" encoding="utf-8"?><feed xmlns="http://www.w3.org/2005/Atom" ><generator uri="https://jekyllrb.com/" version="3.5.1">Jekyll</generator><link href="https://emacs.cafe/feed.xml" rel="self" type="application/atom+xml" /><link href="https://emacs.cafe/" rel="alternate" type="text/html" /><updated>2018-06-12T21:24:33+02:00</updated><id>https://emacs.cafe/</id><title type="html">Emacs café</title><subtitle>A blog about Emacs, mostly focused on JavaScript development, by Nicolas Petton.
</subtitle><entry><title type="html">Using Ledger for YNAB-like envelope budgeting</title><link href="https://emacs.cafe/ledger/emacs/ynab/budgeting/2018/06/12/elbank-ynab.html" rel="alternate" type="text/html" title="Using Ledger for YNAB-like envelope budgeting" /><published>2018-06-12T21:20:00+02:00</published><updated>2018-06-12T21:20:00+02:00</updated><id>https://emacs.cafe/ledger/emacs/ynab/budgeting/2018/06/12/elbank-ynab</id><content type="html" xml:base="https://emacs.cafe/ledger/emacs/ynab/budgeting/2018/06/12/elbank-ynab.html">&lt;h1 id=&quot;bye-bye-elbank&quot;&gt;Bye bye Elbank&lt;/h1&gt;

&lt;p&gt;I have to start this post with this: I will not be actively maintaining
&lt;a href=&quot;https://github.com/NicolasPetton/elbank&quot;&gt;Elbank&lt;/a&gt; anymore, simply because I
switched back to &lt;a href=&quot;https://www.ledger-cli.org/&quot;&gt;Ledger&lt;/a&gt;. If someone wants to
take over, please contact me!&lt;/p&gt;

&lt;p&gt;The main reason for switching is budgeting. While Elbank was a cool experiment,
it is not an accounting software, and inherently lacks support for powerful
budgeting.&lt;/p&gt;

&lt;p&gt;When I started working on Elbank as a replacement for Ledger, I was looking for
a reporting tool within Emacs that would fetch bank transactions automatically,
so I wouldn’t have to enter transactions by hand (this is a seriously tedious
task, and I grew tired of doing it after roughly two years, and finally gave up).&lt;/p&gt;

&lt;p&gt;Since then, I learned about ledger-autosync and boobank, which I use to sync my
bank statements with Ledger (more about that in another post).&lt;/p&gt;

&lt;h1 id=&quot;ynabs-way-of-budgeting&quot;&gt;YNAB’s way of budgeting&lt;/h1&gt;

&lt;p&gt;I only came across &lt;a href=&quot;https://ynab.com&quot;&gt;YNAB&lt;/a&gt; recently. While I won’t use their
software (being a non-free web application, and, you know… there’s no &lt;code class=&quot;highlighter-rouge&quot;&gt;M-x
ynab&lt;/code&gt;), I think that the principles behind it are really appealing for personal
budgeting. I encourage you to &lt;a href=&quot;https://www.youneedabudget.com/method/&quot;&gt;read more about
it&lt;/a&gt; (or grab a &lt;a href=&quot;https://www.youneedabudget.com/book-order-now/&quot;&gt;copy of the
book&lt;/a&gt;, it’s great), but here’s
the idea.&lt;/p&gt;

&lt;ol&gt;
&lt;li&gt;
&lt;p&gt;&lt;strong&gt;Budget every euro&lt;/strong&gt;: Quite simple once you get it. Every single Euro you have
should be in a budget envelope. You should assign a job to every Euro you
earn (that’s called
&lt;a href=&quot;https://en.wikipedia.org/wiki/Zero-based_budgeting&quot;&gt;zero-based&lt;/a&gt;, &lt;a href=&quot;https://en.wikipedia.org/wiki/Envelope_system&quot;&gt;envelope
system&lt;/a&gt;).&lt;/p&gt;
&lt;/li&gt;
&lt;li&gt;
&lt;p&gt;&lt;strong&gt;Embrace your true expenses&lt;/strong&gt;: Plan for larger and less frequent expenses, so
when a yearly bill arrives, or your car breaks down, you’ll be covered.&lt;/p&gt;
&lt;/li&gt;
&lt;li&gt;
&lt;p&gt;&lt;strong&gt;Roll with the punches&lt;/strong&gt;: Address overspending as it happens by taking money
overspent from another envelope. As long as you keep budgeting, you’re
succeeding.&lt;/p&gt;
&lt;/li&gt;
&lt;li&gt;
&lt;p&gt;&lt;strong&gt;Age your money&lt;/strong&gt;: Spend less than you earn, so your money stays in the bank
account longer. As you do that, the age of your money will grow, and once
you reach the goal of spending money that is at least one month old, you
won’t worry about that next bill.&lt;/p&gt;
&lt;/li&gt;
&lt;/ol&gt;

&lt;h1 id=&quot;implementation-in-ledger&quot;&gt;Implementation in Ledger&lt;/h1&gt;

&lt;p&gt;I assume that you are familiar with Ledger, but if not I recommend reading its
great
&lt;a href=&quot;https://www.ledger-cli.org/3.0/doc/ledger3.html#Introduction-to-Ledger&quot;&gt;introduction&lt;/a&gt;
and &lt;a href=&quot;https://www.ledger-cli.org/3.0/doc/ledger3.html#Ledger-Tutorial&quot;&gt;tutorial&lt;/a&gt;.&lt;/p&gt;

&lt;p&gt;The implementation in Ledger uses plain double-entry accounting. I took most of
it from
&lt;a href=&quot;http://sachachua.com/blog/2014/11/keeping-financial-score-ledger/&quot;&gt;Sacha&lt;/a&gt;, with
some minor differences.&lt;/p&gt;

&lt;h2 id=&quot;budgeting-new-money&quot;&gt;Budgeting new money&lt;/h2&gt;

&lt;p&gt;After each income transaction, I budget the new money:&lt;/p&gt;

&lt;div class=&quot;highlighter-rouge&quot;&gt;&lt;pre class=&quot;highlight&quot;&gt;&lt;code&gt;2018-06-12 Employer
Assets:Bank:Checking 1600.00 EUR
Income:Salary -1600.00 EUR

2018-06-12 Budget
[Assets:Budget:Food] 400.00 EUR
[Assets:Budget:Rent] 600.00 EUR
[Assets:Budget:Utilities] 600.00 EUR
[Equity:Budget] -1600.00 EUR
&lt;/code&gt;&lt;/pre&gt;
&lt;/div&gt;

&lt;p&gt;Did you notice the square brackets around the accounts of the budget
transaction? It’s a feature Ledger calls &lt;a href=&quot;https://www.ledger-cli.org/3.0/doc/ledger3.html#Virtual-postings&quot;&gt;virtual
postings&lt;/a&gt;. These
postings are not considered real, and won’t be present in any report that uses
the &lt;code class=&quot;highlighter-rouge&quot;&gt;--real&lt;/code&gt; flag. This is exactly what we want, since it’s a budget allocation
and not a “real” transaction. Therefore we’ll use the &lt;code class=&quot;highlighter-rouge&quot;&gt;--real&lt;/code&gt; flag for all
reports except for our budget report.&lt;/p&gt;

&lt;h2 id=&quot;automatically-crediting-budget-accounts-when-spending-money&quot;&gt;Automatically crediting budget accounts when spending money&lt;/h2&gt;

&lt;p&gt;Next, we need to credit the budget accounts each time we spend money. Ledger
has another neat feature called &lt;a href=&quot;https://www.ledger-cli.org/3.0/doc/ledger3.html#Automated-Transactions&quot;&gt;automated
transactions&lt;/a&gt;
for this:&lt;/p&gt;

&lt;div class=&quot;highlighter-rouge&quot;&gt;&lt;pre class=&quot;highlight&quot;&gt;&lt;code&gt;= /Expenses/
[Assets:Budget:Unbudgeted] -1.0
[Equity:Budget] 1.0

= /Expenses:Food/
[Assets:Budget:Food] -1.0
[Assets:Budget:Unbudgeted] 1.0
= /Expenses:Rent/
[Assets:Budget:Rent] -1.0
[Assets:Budget:Unbudgeted] 1.0
= /Expenses:Utilities/
[Assets:Budget:Utilities] -1.0
[Assets:Budget:Unbudgeted] 1.0
&lt;/code&gt;&lt;/pre&gt;
&lt;/div&gt;

&lt;p&gt;Every expense is taken out of the &lt;code class=&quot;highlighter-rouge&quot;&gt;Assets:Budget:Unbudgeted&lt;/code&gt; account by default.&lt;/p&gt;

&lt;p&gt;This forces me to budget properly, as &lt;code class=&quot;highlighter-rouge&quot;&gt;Assets:Budget:Unbudgeted&lt;/code&gt; should always
be 0 (if it is not the case I immediately know that there is something wrong
going on).&lt;/p&gt;

&lt;p&gt;All other automatic transactions take money out of the
&lt;code class=&quot;highlighter-rouge&quot;&gt;Assets:Budget:Unbudgeted&lt;/code&gt; account instead of &lt;code class=&quot;highlighter-rouge&quot;&gt;Equity:Budget&lt;/code&gt; account.&lt;/p&gt;

&lt;h2 id=&quot;a-budget-report&quot;&gt;A Budget report&lt;/h2&gt;

&lt;p&gt;This is the final piece of the puzzle. Here’s the budget report command:&lt;/p&gt;

&lt;div class=&quot;highlighter-rouge&quot;&gt;&lt;pre class=&quot;highlight&quot;&gt;&lt;code&gt;ledger --empty -S -T -f ledger.dat bal ^assets:budget
&lt;/code&gt;&lt;/pre&gt;
&lt;/div&gt;

&lt;p&gt;If we have the following transactions:&lt;/p&gt;

&lt;div class=&quot;highlighter-rouge&quot;&gt;&lt;pre class=&quot;highlight&quot;&gt;&lt;code&gt;2018/06/12 Groceries store
Expenses:Food 123.00 EUR
Assets:Bank:Checking

2018/06/12 Landlord
Expenses:Rent 600.00 EUR
Assets:Bank:Checking

2018/06/12 Internet provider
Expenses:Utilities:Internet 40.00 EUR
Assets:Bank:Checking
&lt;/code&gt;&lt;/pre&gt;
&lt;/div&gt;

&lt;p&gt;Here’s what the report looks like:&lt;/p&gt;

&lt;div class=&quot;highlighter-rouge&quot;&gt;&lt;pre class=&quot;highlight&quot;&gt;&lt;code&gt; 837.00 EUR Assets:Budget
560.00 EUR Utilities
277.00 EUR Food
0 Rent
0 Unbudgeted
--------------------
837.00 EUR
&lt;/code&gt;&lt;/pre&gt;
&lt;/div&gt;

&lt;h1 id=&quot;conclusion&quot;&gt;Conclusion&lt;/h1&gt;

&lt;p&gt;Ledger is amazingly powerful, and provides a great framework for YNAB-like
budgeting. In a future post I’ll explain how I automatically import my bank
transactions using a mix of &lt;code class=&quot;highlighter-rouge&quot;&gt;ledger-autosync&lt;/code&gt; and &lt;code class=&quot;highlighter-rouge&quot;&gt;weboob&lt;/code&gt;.&lt;/p&gt;</content><author><name>Nicolas Petton</name></author><summary type="html">Bye bye Elbank</summary></entry><entry><title type="html">Introducing Elbank</title><link href="https://emacs.cafe/elbank/emacs/2017/11/30/elbank-intro.html" rel="alternate" type="text/html" title="Introducing Elbank" /><published>2017-11-30T14:28:00+01:00</published><updated>2017-11-30T14:28:00+01:00</updated><id>https://emacs.cafe/elbank/emacs/2017/11/30/elbank-intro</id><content type="html" xml:base="https://emacs.cafe/elbank/emacs/2017/11/30/elbank-intro.html">&lt;p&gt;&lt;a href=&quot;https://github.com/NicolasPetton/elbank&quot;&gt;Elbank&lt;/a&gt; is a new Emacs package I’ve
been working on lately. It’s a &lt;em&gt;personal finances&lt;/em&gt; and &lt;em&gt;budgeting&lt;/em&gt; package for
Emacs that uses &lt;a href=&quot;https://weboob.org&quot;&gt;Weboob&lt;/a&gt; for scraping data from bank
websites.&lt;/p&gt;
@@ -1197,19 +1361,4 @@ project.&lt;/p&gt;

&lt;p&gt;We still have a lot to explore like linting, getting good auto-completion, using
snippets, setting up a REPL and debugger, etc. but I promised I would keep posts
short, so stay tuned for part #2!&lt;/p&gt;</content><author><name>Nicolas Petton</name></author><summary type="html">There’s a lot that can be done to make Emacs a great tool for JavaScript development. So much that I had to split it up into several posts.</summary></entry><entry><title type="html">M-x hello-world</title><link href="https://emacs.cafe/jekyll/update/2017/04/21/hello-world.html" rel="alternate" type="text/html" title="M-x hello-world" /><published>2017-04-21T23:14:09+02:00</published><updated>2017-04-21T23:14:09+02:00</updated><id>https://emacs.cafe/jekyll/update/2017/04/21/hello-world</id><content type="html" xml:base="https://emacs.cafe/jekyll/update/2017/04/21/hello-world.html">&lt;p&gt;All blogs should begin with an introductory post, so here we go.&lt;/p&gt;

&lt;p&gt;I’ve been willing to make a blog dedicated
to &lt;a href=&quot;http://gnu.org/software/emacs&quot;&gt;Emacs&lt;/a&gt; for a long time, but until now I
couldn’t find the right topic.&lt;/p&gt;

&lt;p&gt;This blog will have a focus on using Emacs as an environment for writing
JavaScript. I will talk about Emacs configurations specific to JavaScript and
packages that make Emacs the great and powerful IDE that it is for web
development.&lt;/p&gt;

&lt;p&gt;I’ll try to keep all posts short and to the point, and I’ll most probably post
tutorial videos from time to time.&lt;/p&gt;

&lt;p&gt;Topics might sometimes slip a bit from the original focus, but as long as it’s
about Emacs, I think it’ll be ok.&lt;/p&gt;</content><author><name>Nicolas Petton</name></author><summary type="html">All blogs should begin with an introductory post, so here we go.</summary></entry></feed>
short, so stay tuned for part #2!&lt;/p&gt;</content><author><name>Nicolas Petton</name></author><summary type="html">There’s a lot that can be done to make Emacs a great tool for JavaScript development. So much that I had to split it up into several posts.</summary></entry></feed>

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@@ -78,6 +78,18 @@
<li>
<span class="post-meta">Jun 12, 2018</span>

<h2>
<a class="post-link" href="/ledger/emacs/ynab/budgeting/2018/06/12/elbank-ynab.html">Using Ledger for YNAB-like envelope budgeting</a>
</h2>
<div class="post-desc post-meta">A quick guide to setup Ledger for envelope budgeting</div>
</li>
<li>
<span class="post-meta">Nov 30, 2017</span>

<h2>


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<h1 class="post-title" itemprop="name headline">Using Ledger for YNAB-like envelope budgeting</h1>
<p class="post-meta">
<time datetime="2018-06-12T21:20:00+02:00" itemprop="datePublished">
Jun 12, 2018
</time>
• <span itemprop="author" itemscope itemtype="http://schema.org/Person"><span itemprop="name">Nicolas Petton</span></span>
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<h1 id="bye-bye-elbank">Bye bye Elbank</h1>

<p>I have to start this post with this: I will not be actively maintaining
<a href="https://github.com/NicolasPetton/elbank">Elbank</a> anymore, simply because I
switched back to <a href="https://www.ledger-cli.org/">Ledger</a>. If someone wants to
take over, please contact me!</p>

<p>The main reason for switching is budgeting. While Elbank was a cool experiment,
it is not an accounting software, and inherently lacks support for powerful
budgeting.</p>

<p>When I started working on Elbank as a replacement for Ledger, I was looking for
a reporting tool within Emacs that would fetch bank transactions automatically,
so I wouldn’t have to enter transactions by hand (this is a seriously tedious
task, and I grew tired of doing it after roughly two years, and finally gave up).</p>

<p>Since then, I learned about ledger-autosync and boobank, which I use to sync my
bank statements with Ledger (more about that in another post).</p>

<h1 id="ynabs-way-of-budgeting">YNAB’s way of budgeting</h1>

<p>I only came across <a href="https://ynab.com">YNAB</a> recently. While I won’t use their
software (being a non-free web application, and, you know… there’s no <code class="highlighter-rouge">M-x
ynab</code>), I think that the principles behind it are really appealing for personal
budgeting. I encourage you to <a href="https://www.youneedabudget.com/method/">read more about
it</a> (or grab a <a href="https://www.youneedabudget.com/book-order-now/">copy of the
book</a>, it’s great), but here’s
the idea.</p>

<ol>
<li>
<p><strong>Budget every euro</strong>: Quite simple once you get it. Every single Euro you have
should be in a budget envelope. You should assign a job to every Euro you
earn (that’s called
<a href="https://en.wikipedia.org/wiki/Zero-based_budgeting">zero-based</a>, <a href="https://en.wikipedia.org/wiki/Envelope_system">envelope
system</a>).</p>
</li>
<li>
<p><strong>Embrace your true expenses</strong>: Plan for larger and less frequent expenses, so
when a yearly bill arrives, or your car breaks down, you’ll be covered.</p>
</li>
<li>
<p><strong>Roll with the punches</strong>: Address overspending as it happens by taking money
overspent from another envelope. As long as you keep budgeting, you’re
succeeding.</p>
</li>
<li>
<p><strong>Age your money</strong>: Spend less than you earn, so your money stays in the bank
account longer. As you do that, the age of your money will grow, and once
you reach the goal of spending money that is at least one month old, you
won’t worry about that next bill.</p>
</li>
</ol>

<h1 id="implementation-in-ledger">Implementation in Ledger</h1>

<p>I assume that you are familiar with Ledger, but if not I recommend reading its
great
<a href="https://www.ledger-cli.org/3.0/doc/ledger3.html#Introduction-to-Ledger">introduction</a>
and <a href="https://www.ledger-cli.org/3.0/doc/ledger3.html#Ledger-Tutorial">tutorial</a>.</p>

<p>The implementation in Ledger uses plain double-entry accounting. I took most of
it from
<a href="http://sachachua.com/blog/2014/11/keeping-financial-score-ledger/">Sacha</a>, with
some minor differences.</p>

<h2 id="budgeting-new-money">Budgeting new money</h2>

<p>After each income transaction, I budget the new money:</p>

<div class="highlighter-rouge"><pre class="highlight"><code>2018-06-12 Employer
Assets:Bank:Checking 1600.00 EUR
Income:Salary -1600.00 EUR

2018-06-12 Budget
[Assets:Budget:Food] 400.00 EUR
[Assets:Budget:Rent] 600.00 EUR
[Assets:Budget:Utilities] 600.00 EUR
[Equity:Budget] -1600.00 EUR
</code></pre>
</div>

<p>Did you notice the square brackets around the accounts of the budget
transaction? It’s a feature Ledger calls <a href="https://www.ledger-cli.org/3.0/doc/ledger3.html#Virtual-postings">virtual
postings</a>. These
postings are not considered real, and won’t be present in any report that uses
the <code class="highlighter-rouge">--real</code> flag. This is exactly what we want, since it’s a budget allocation
and not a “real” transaction. Therefore we’ll use the <code class="highlighter-rouge">--real</code> flag for all
reports except for our budget report.</p>

<h2 id="automatically-crediting-budget-accounts-when-spending-money">Automatically crediting budget accounts when spending money</h2>

<p>Next, we need to credit the budget accounts each time we spend money. Ledger
has another neat feature called <a href="https://www.ledger-cli.org/3.0/doc/ledger3.html#Automated-Transactions">automated
transactions</a>
for this:</p>

<div class="highlighter-rouge"><pre class="highlight"><code>= /Expenses/
[Assets:Budget:Unbudgeted] -1.0
[Equity:Budget] 1.0

= /Expenses:Food/
[Assets:Budget:Food] -1.0
[Assets:Budget:Unbudgeted] 1.0
= /Expenses:Rent/
[Assets:Budget:Rent] -1.0
[Assets:Budget:Unbudgeted] 1.0
= /Expenses:Utilities/
[Assets:Budget:Utilities] -1.0
[Assets:Budget:Unbudgeted] 1.0
</code></pre>
</div>

<p>Every expense is taken out of the <code class="highlighter-rouge">Assets:Budget:Unbudgeted</code> account by default.</p>

<p>This forces me to budget properly, as <code class="highlighter-rouge">Assets:Budget:Unbudgeted</code> should always
be 0 (if it is not the case I immediately know that there is something wrong
going on).</p>

<p>All other automatic transactions take money out of the
<code class="highlighter-rouge">Assets:Budget:Unbudgeted</code> account instead of <code class="highlighter-rouge">Equity:Budget</code> account.</p>

<h2 id="a-budget-report">A Budget report</h2>

<p>This is the final piece of the puzzle. Here’s the budget report command:</p>

<div class="highlighter-rouge"><pre class="highlight"><code>ledger --empty -S -T -f ledger.dat bal ^assets:budget
</code></pre>
</div>

<p>If we have the following transactions:</p>

<div class="highlighter-rouge"><pre class="highlight"><code>2018/06/12 Groceries store
Expenses:Food 123.00 EUR
Assets:Bank:Checking

2018/06/12 Landlord
Expenses:Rent 600.00 EUR
Assets:Bank:Checking

2018/06/12 Internet provider
Expenses:Utilities:Internet 40.00 EUR
Assets:Bank:Checking
</code></pre>
</div>

<p>Here’s what the report looks like:</p>

<div class="highlighter-rouge"><pre class="highlight"><code> 837.00 EUR Assets:Budget
560.00 EUR Utilities
277.00 EUR Food
0 Rent
0 Unbudgeted
--------------------
837.00 EUR
</code></pre>
</div>

<h1 id="conclusion">Conclusion</h1>

<p>Ledger is amazingly powerful, and provides a great framework for YNAB-like
budgeting. In a future post I’ll explain how I automatically import my bank
transactions using a mix of <code class="highlighter-rouge">ledger-autosync</code> and <code class="highlighter-rouge">weboob</code>.</p>

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