What categories are for
Categories group transactions for reports and budgets. They should describe the purpose of spending, not the name of every merchant.
Example. Purchases from three supermarkets can use one Groceries category. The merchant name stays in the transaction description.
Choose the first categories
Select a small starter set or add your own names. Nothing is created until the step is confirmed. The category list can be changed later.
Good category names
- Groceries
- Cafes
- Public transport
- Software subscriptions
Names such as Other 2 or a single shop name become hard to use in reports.
Skip and return later
Transactions can exist without a category. Skip the step if the structure is not clear yet. After importing a statement, the real spending history usually makes the choice easier.
How categories affect budgets
A budget counts expenses from selected categories. Create a separate category when it needs its own limit or report. Do not create one only because a single purchase looks different.