How transaction categories work
How transaction categories work
Your transaction categories form the basis for how other features and widgets work throughout the app. Here in this guide, we'll give you the full rundown on how categories work.
Rule of thumb: Keeping transactions and merchants updated and categorised makes your financial information up to date and accurate throughout the app.
1. Hierarchy of groups, categories & tags.
We have 3 levels of category hierarchy, below is a quick breakdown of how they work:
- Groups: These can be created in the 'Credit & edit categories' option in settings. This is where you can create parent groups that categories sit inside of, for example, you might create a 'Food' group which would then have categories in it such as groceries, eating out, snacks etc.
- Categories: These are the core of the app, categories can be created within groups and are used for assigning to transactions. For example, if you have a transaction for a supermarket shop, you'd categorise this to 'Food & Drink' or any other category you see as a good fit.
- Tags: Tags are used for an extra layer of detail to transactions. For that same supermarket spend transaction, you might want to add some extra detail to what that was for. In this case, you'd open transaction details for that transaction and add a tag 'Christmas shop' if it was groceries for christmas. This then allows you to report on that in money insights.
2. Groups
Groups can be created in the settings screen by selecting 'Create and edit categories'. You'll then be able to select the 'New group' button and simply drag and drop existing categories into different groups to organise them, or create new categories within groups.
3. Categories
Within those groups, you can create or edit categories by selecting the 'New category' button, or to edit, simply select a category to open the category details. Categories fall into 3 buckets, expense categories, income categories and one-off budget categories. Below is a quick breakdown on how they work.
Expense categories
These are categories for when you spend money. When you connect your accounts, we'll automatically categorise most of your expense transactions with default categories. You can create custom categories in settings, when categorising transactions, or when creating budgets.
Income categories
Income categories are for money coming in. Unlike expenses, income doesn't have any default categories, so they're all custom. You can create income categories in a few ways: when setting up an income budget, when categorising transactions or merchants, or directly from settings. After signing up, your income transactions are automatically categorised into your default income category, but you can re-categorise these into a new category at any time if you need.
One-off budget categories
One-off categories are created when you create one-off budgets. Once you create a one-off budget, your one-off category will appear when you categorise expense transactions, so you can allocate expenses to that budget.
Pre-set categories
Within your expense and income categories, we include pre-set categories that cannot be edited or removed. These include uncategorised, ignore, transfer, and one-off. If your transactions aren't auto-categorised, then they're left uncategorised, so you'll need to update the category. We try to pick up on all your internal account transfers and auto-categorise those into the transfer category. If you have any transactions you'd like to ignore, then you can use that category also. Lastly, if you have any transactions that are one-off but don't fall within a created budget or regular spending or income, then you can categorise them as one-off.
Default categories
Default categories are all the categories we get from Akahu data, default categories are automatically added when you connect your accounts and are automatically assigned to most of your expense transactions. You can choose to delete default categories by holding down on the category when categorising transactions.
4. Tags
Tags offer a deeper layer of organising and reporting. To add tags to transactions, you can simply go to transaction details and add a tag to the transaction.
5. How categories behave throughout the app
Below is a quick breakdown on how categories behave throughout the app:
- Expense category: Transactions categorised to an expense category display data throughout the app ✅
- Income category: Transactions categorised to an income category display data throughout the app ✅
- One-off budget category: Transactions categorised to a one-off budget category display data throughout the app ✅
- Uncategorised: Uncategorised transactions do not display data throughout the app ❌
- Ignore: Ignore transactions do not display data throughout the app ❌
- Transfer: Transfer transactions do not display data throughout the app ❌
- One-off: Transactions categorised as a one-off will display data throughout the app ✅
You're all ready to go 🎉
Woohoo! You're all set up and have a good understanding on how categories work. If you run into any issues while getting everything set up, feel free to get in touch with us at hello@budgetbuddie.co.nz