I dropped out of accounting in college. I hated every minute of it and could not make two columns balance under any circumstances.

I have always had trouble budgeting. For me, the balance in my checking account represented how much I could blow on whatever impulse purchase suited me that day. Prior to my daughter’s wedding, I looked for help. I found it in YNAB. YNAB uses a sort of “envelope” system for tracking where money needs to be. It worked very well, the proof being was that I was actually able to afford to pay for the wedding.

Then YNAB went to an online-only subscription plan and I started looking elsewhere. Their online version works fine, but no longer feels right. Plus, I don’t need yet another service with access to my financial accounts.

What I found was Ledger. Ledger is a command-line double-entry accounting tool that uses a plain-text format for entries. Ledger was created in 2003 by John Wiegley, the current maintainer of Emacs. I love plain-text for most things, most of the time, so I dove in.

One of the things I’ve learned while struggling with spending is that it’s beneficial to enter every transaction by hand. That’s right every transaction should be entered by hand. This forces me to feel everything I spend. It’s also why I still prefer to hand-write checks. I’m reminded that it’s real money. Also, small monthly subscriptions that I may have missed become visible. I’ve saved hundreds of dollars simply by forcing myself to pay attention.

Here’s an example of an entry in my Ledger file:

2016-08-08 * Betterment Transfer
    Assets:Betterment:Roth IRA                         $250.00
    Assets:Checking

2016/08/09 * Blue Apron
    Expenses:Food:Groceries                             $59.94
    Assets:Checking

Since Ledger forces double entry, each transaction must contain both the target and source accounts. These accounts need not be set up ahead of time, they just become accounts the first time they are used. They are hierarchical and can be nested as deeply as I like. I try to keep things at just a few levels deep. I’m learning accounting as I go!

To mimic the “bucket” functionality of YNAB, I use Ledger’s “virtual” accounts. These are separate accounts that can be either shown or hidden when generating balances or other reports. Here’s an example in which I move $100 from Checking into my “Vacation” bucket.

2016-08-14 * Vacation Fund
    [Bucket:Vacation]   $100
    [Assets:Checking]

Notice the brackets around each entry. This indicates that those are virtual, but should balance. If I look at my balance with Ledger after that it will show my Checking account has $100 less than before, even though it really still has the $100. To see the balances without virtual transactions, I use the --real switch. With --real, Ledger shows what I actually have in the account. Without using --real I see what is left after moving the $100 to “Vacation”. I’m still getting the hang of it, but this is all easier to do than to explain.

Emacs comes with ledger-mode, making data entry easy using auto-completion for accounts and automatically copying accounts from similar entries. It all sounds like a lot of work, but I find that it’s easier for me than using Quicken or YNAB. Plus, it’s all mine, and it’s all free.

Ledger does lots more, including handling multiple currencies, commodities and pricing, automatic transactions, etc. I’m trying to start simple, but this all feels very good. Being in complete control of my data using an open, simple format makes me feel more in control of my finances.

You can find lots of good resources at plaintextaccounting.org