Categorizing Transactions

Categorizing your transactions is how Balance tracks your spending against your budget. Every transaction needs a category to accurately reflect where your money is going and update your budget progress in real-time.

Why Categorization Matters

Assigning categories to transactions allows Balance to:

• Track budget progress - See how much you’ve spent in each category
• Update Current Balance - Calculate how much money you have left to spend
• Identify spending patterns - Understand where your money goes
• Partner coordination - Both see accurate, up-to-date budget information
• Monthly tracking - Review spending by category over time

Without categories, transactions don’t count toward your budget. That uncategorized purchase won’t show up in your Groceries budget until you assign it.

How to Categorize a Transaction

Single Transaction Categorization

Step 1: Open the transaction

1. Go to Transactions tab (shown in screenshot)
2. Tap the transaction you want to categorize
3. Transaction details page opens

Step 2: View transaction details

The transaction details page shows all information about the transaction. If it’s uncategorized, you’ll see a “Category” section or “Tap here to add categories” prompt.

Step 3: Open category selection

From the transaction details page, tap “Category” section (or “Tap here to add categories” if uncategorized). This opens the category selection page.

Step 4: Select a category

The category selection page shows all your budget categories (shown in screenshot above). Browse the list and tap the appropriate category.

Step 5: Save and return

1. The full transaction amount automatically assigns to that category
2. Tap “Save Transaction” to confirm
3. The page automatically returns to transactions
4. The transaction now shows with the category badge

That’s it! The transaction is categorized and your budget updates immediately.

Visual Flow

Transactions Tab
    ↓ (tap transaction)
Transaction Details
    ↓ (tap "Category")
Category Selection
    ↓ (tap category name)
Back to Transactions
    ↓
Transaction now shows category

Finding the Right Category

Category Organization

Categories in Balance are organized by type:

Income Categories:

• Salary
• Business Income
• Investment Income
• Other Income
• (Custom income categories you created)

Expense Categories:

• Groceries
• Dining Out
• Rent/Mortgage
• Utilities
• Transportation
• Entertainment
• (All your other expense categories)

Choosing the Best Category

Ask yourself:

• What was this purchase for primarily?
• Which budget category should track this?
• How do we normally categorize similar purchases?

Common examples:

• Grocery store → Groceries
• Restaurant meal → Dining Out
• Gas station → Transportation
• Electric bill → Utilities
• Netflix → Entertainment
• Paycheck → Salary
• Freelance payment → Business Income

When It’s Not Obvious

Target/Walmart/Amazon purchases:

• If mostly groceries → Groceries
• If mostly household items → Household
• If mixed → Consider splitting (see below)

Gas station purchases:

• Gas → Transportation
• Snacks while pumping gas → Dining Out or Groceries
• Split if significant amount for both

Tips:

• Be consistent with how you categorize similar items
• Discuss with your partner which category to use
• When in doubt, pick the larger portion of the purchase
• You can always change it later

Transaction Amount Display

When assigning a category, you’ll see two cards at the top:

Transaction Amount Card

Shows the total amount from your bank. For a single category assignment, this is the amount that will be assigned.

Tap this card to see full transaction details including:

• Merchant name and location
• Original description
• Full date and time

Categorized Amount Card

Shows how much has been assigned to categories. For a single category, this matches the transaction amount.

Both amounts must match for the transaction to save properly (more relevant when splitting transactions).

Understanding Category Types

Income vs Expense

Categories are designated as either Income or Expense when created:

Income Categories (green):

• For money coming in
• Increases your budget’s Current Balance
• Examples: Salary, freelance income, investment returns

Expense Categories (regular):

• For money going out
• Decreases available balance in that category
• Examples: Groceries, rent, entertainment

The transaction type (Income/Expense) determines which categories show up when categorizing.

Real-Time Budget Updates

As soon as you assign a category:

1. Category balance updates - Spent amount increases
2. Current Balance recalculates - Overall budget adjusts
3. Progress bars update - Visual indicators refresh
4. Partner sees changes - Updates sync across all devices immediately

Both you and your partner will see the updated budget within seconds.

Uncategorized Transaction Indicators

Balance makes it easy to spot uncategorized transactions:

On Transactions list:

• Transaction appears without a category badge
• Transaction name appears in bold text
• Contributes to “X Uncategorized” count at top

Visual cues:

• Uncategorized badge at top shows count
• Missing category badge on transaction
• “Tap here to add categories” hint in details

Changing Categories Later

Made a mistake? No problem!

To change a category:

1. Tap the transaction
2. Tap the Category section (shows current category)
3. Select a different category
4. New category assigns immediately
5. Budget updates automatically

You can change categories as many times as needed. The most recent assignment is what counts toward your budget.

Best Practices

Daily Habits

• ✅ Check for uncategorized transactions daily
• ✅ Categorize as soon as they appear
• ✅ Review yesterday’s spending each morning
• ✅ Keep uncategorized count at zero

Consistency

• ✅ Use the same category for similar purchases
• ✅ Discuss category choices with your partner
• ✅ Establish rules for ambiguous items
• ✅ Document category decisions if helpful

Efficiency

• ✅ Use bulk categorization for multiple similar transactions
• ✅ Categorize account by account using filters
• ✅ Process uncategorized transactions all at once
• ✅ Don’t overthink it - you can always change later

Accuracy

• ✅ Pick the most accurate category, not just convenient
• ✅ Split transactions when purchases cross categories
• ✅ Mark transfers appropriately (they’re not expenses)
• ✅ Use income categories for refunds/returns

Common Mistakes to Avoid

Categorizing transfers as expenses:

• Money between your accounts isn’t spending
• Mark as Transfer instead of assigning category
• Keeps budget accurate

Rushing through categorization:

• Take a moment to pick the right category
• Wrong categories make budget meaningless
• Better to be accurate than fast

Not categorizing regularly:

• Letting transactions pile up
• Harder to remember what purchases were for
• Budget becomes inaccurate

Over-splitting simple transactions:

• $5 coffee doesn’t need to be split
• Only split when amounts are significant
• Don’t make it harder than necessary

Working with Your Partner

Division of Work

Option 1: Shared responsibility

• Both partners categorize as they see transactions
• First one to see it, categorizes it
• Requires checking uncategorized count daily

Option 2: Assigned accounts

• Partner A handles their transactions
• Partner B handles their transactions
• Each responsible for their spending

Option 3: Primary categorizer

• One partner handles all categorization
• Other partner reviews
• Clear responsibility

Communication Tips

• Discuss ambiguous transactions together
• Establish category rules for common purchases
• Review each other’s categorization periodically
• Use consistent categories for similar items

Troubleshooting

Can’t Find the Right Category

Solution:

1. Check if category exists in Manage Budget
2. Create a new category if needed
3. Choose closest existing category temporarily
4. Discuss with partner before creating new categories

Transaction Won’t Save Category

Common causes:

• For split transactions, amounts must equal transaction total
• Network connection issue (try again)
• Try restarting app

Category Doesn’t Appear in List

Check that:

• Category hasn’t been deactivated
• Viewing correct category type (income vs expense)
• Transaction type matches category type

Budget Not Updating

Solutions:

1. Pull down on Budget tab to refresh
2. Verify transaction is categorized (check details)
3. Check that category still exists
4. Ensure transaction isn’t marked as transfer

Next Steps

Now that you understand single transaction categorization:

• Bulk Categorizing - Categorize multiple at once
• Split Transactions - Divide across categories
• Transaction Types - Understand income vs expense
• Setting Category Budgets - Optimize your budget amounts

Need help? Contact our support team - we’re here to assist!