This is doable, but still a bit of a pain:

I pay using different accounts (bank accounts or credit cards). Groceries, in particular, I pay with both checks and cards. Admittedly, this is still a problem with many envelope budgeting SW, but they usually have ways to mitigate this.

The other problem: Say I have two checking accounts A and B, and I pay for groceries with A and car expenses with B. One month I overspend car stuff and my envelope for B is in the negative, and I don't have enough emergency reserve. I take money out of my grocery envelope under A to bring the car envelope in B back to 0.

Now if I did this in GnuCash, it will show a wrong balance in one of my checking accounts (unless I physically transferred money between the two accounts).

Your setup will work if you tend to spend everything from one account. I am curious, though: If you do it this way, doesn't it make reconciling a bit of a pain? Let me explain:

When I go to do groceries, I usually have multiple categories I am purchasing (example below):

1. Groceries = $60

2. Supplies = $30

3. Miscellaneous (catch-all) = $10

I pay with a check of $100. How do you represent this in GnuCash? Will you list 3 separate transactions coming out of each virtual subaccount? If so, do you then not reconcile with your bank statement? Or does GnuCash let you mark it all as one transaction under Checking to make reconciliation easy?

Ledger CLI has good support for "true" virtual accounts, so that the "real" accounts show the real world transactions (it will show up as one transaction from Checking to the Grocery Store), while simultaneously letting you split this into the 3 virtual budget accounts.

Gnucash allows split transactions, so your case is not a problem. So your check of $100 out of your checking account gets split into 3 different places, e.g. expense accounts.

Your actual representation of chequing accounts should really represent the bank account,so you shouldn't do what you describe (that lead to a wrong balance), your actual budgeting is done elsewhere.

If you weren't doing envelope budgeting, you might just mark things into expense accounts, so they keep a running track of what you've spent.

I haven't used it for a while so may get details a bit mixed, but the gist of it is right, If you want to do envelope style budgeting, you have a few possibilities. One is to do regular expense accounts but change your reporting period to say 1 month, and you use the report tools to see what is happening. In this way if you overspend in one, and underspend in another, it all rolls up into the same total. Another way would be more explicit, you would allocate a liability account 1st of each month for each "envelope" and then spend against that. You could freely transfer between these, and you can carry over etc. This would give you an up to date view easily. There are other schemes, depends what you want to make easy and what you make hard.

By the way I'm pretty sure I remember gnucash has a built in budget tool also, but I've never used it; might be close enough to what you want to be the least effort.

> Gnucash allows split transactions, so your case is not a problem. So your check of $100 out of your checking account gets split into 3 different places, e.g. expense accounts.

I'm aware of that, which is what I meant: If you do it this way, then you can't do envelope budgeting using subaccounts the way the original commenter said (and I agree with you that you should not do it this way).

Both the methods you propose involve significant work on my part, which to me means "Gnucash doesn't support it." For the first method:

> In this way if you overspend in one, and underspend in another, it all rolls up into the same total.

Arguably, this goes against envelope budgeting. The whole analogy is mirroring the physical world, where an envelope cannot go negative. In my envelopes, if one goes negative, then I need to move money from another envelope into it immediately. In your first scenario, since you're using real accounts, we should not do that (otherwise we lose real spending habits data).

Your second approach is closer, but it's a fair amount of work (or perhaps I misunderstood it). Using my example above, if I go to the store and spend $60 on groceries, $30 on supplies and $10 on misc, how do you propose I put that in Gnucash using those liability accounts?

There's always some way to hack it, but when you actually do it for a while, those hacks become tedious. As I said in another comment, the mechanics of envelope budgeting are easy to code, and I'd like the SW to handle those details for me.

I did play with the built-in budget tool. It's like the typical budget tool in most such SW: No carryover of excess budget - you have to manually track it and update it each month.

> Arguably, this goes against envelope budgeting.

Sort of. At least it would give you a monthly total of everything and a roll up of everything, but doesn't handle carry over cleanly. I was suggesting it as a way that works for lots of people but fair enough if it doesn't' fit close enough.

> Your second approach is closer, but it's a fair amount of work (or perhaps I misunderstood it)

It would look like this: Your salary comes in, and instead of matching that transaction to "income" you would split it against a bunch of "envelope" accounts, each however much you want per check. If you use liability accounts (e.g. like an accounts payable account) for this they will count "backwards". This is exactly analogous to envelopes, except that nothing (other than you) stops you from going negative. You can move funds between them whenever you want.

Then when you spent your $100 check you would split that transaction also, and apply the 60/30/10 each to its own account. These carry over of course, so if you don't spend it all this month you'll have extra next month, etc.

Where do you live where grocery stores accept checks?

> Where do you live where grocery stores accept checks?

Are you in Europe? I hear it's unusual there. In the US virtually every store will accept a check. There are still stores that will not take any card. And some stores that will take a a debit card but not a credit card. But they'll all pretty much take checks.

I lived in the US for 26 years and never witnessed anyone pay with a check at a grocery store or other similar retail establishment past the mid 2000s. I assumed they were no longer accepted?

Most people will pay with either cash or card because it's more convenient. But I haven't heard of anyone that refused a check, unless it's a rather large transaction and they're concerned a check will bounce. I myself used checks and not cards for a bunch of years.