+

Bye bye Elbank

+ +

I have to start this post with this: I will not be actively maintaining +Elbank anymore, simply because I +switched back to Ledger. 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 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 (or grab a copy of the +book, 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, envelope +system).

    +
    2. +
  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. +
  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. +
  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.

    +
    5. +
+ +

Implementation in Ledger

+ +

I assume that you are familiar with Ledger, but if not I recommend reading its +great +introduction +and tutorial.

+ +

The implementation in Ledger uses plain double-entry accounting. I took most of +it from +Sacha, 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. 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 +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.

+ +