Setting Up Categories

Why Categories Matter

Every transaction needs a category. Categories are the foundation of your budget and your reports.

Categories let you:

• See where your money goes - Is it groceries? Entertainment? Eating out?
• Create meaningful budgets - Budget $400 for groceries, $200 for gas, etc.
• Generate useful reports - "I spent $800 on dining out last month?!"
• Identify spending patterns - Notice trends over time
• Make better decisions - Armed with real data, not guesses

The Two Types of Categories

HOB has two category types, and understanding the difference is crucial.

Start with the Defaults

HOB comes with basic categories to get you started. Use them as a foundation, then customize.

Default expense categories include:

• Housing (rent/mortgage)
• Utilities
• Groceries
• Dining Out
• Transportation
• Entertainment
• Healthcare
• Personal Care

Creating a New Category

When you need a category that doesn't exist, here's how to create one.

To create a category:

1. Click Categories in the navigation
2. Click Add Category
3. Enter a category name (e.g., "Pet Care", "Coffee Shops", "Gym")
4. Select the type: Income or Expense
5. Optionally assign it to a category group (more on this below)
6. Click Create Category

Naming tips:

• Be specific but not too specific: "Dining Out" is better than "Restaurants/Fast Food/Food Delivery"
• Use your own language: If you call it "Going Out to Eat", use that!
• Keep it short: 1-3 words is ideal
• Avoid redundancy: Don't need both "Gas" and "Fuel" - pick one

Category Groups (Optional)

Category groups let you organize related categories together. This is optional but helpful for reports and budgeting.

Example category groups:

To create a category group:

1. Click Categories
2. Click Manage Groups
3. Click Add Group
4. Enter the group name
5. Click Create Group

Then assign categories to groups when creating or editing categories.

Common Category Setups

Here are some example category structures for different situations.

Minimalist (10-15 categories):

• Housing, Food, Transportation, Health, Entertainment, Shopping, Savings, Debt

Moderate (20-25 categories):

• Rent, Utilities, Groceries, Dining Out, Gas, Car Payment, Car Insurance, Health Insurance, Medical, Prescriptions, Subscriptions, Entertainment, Clothing, Personal Care, Gifts, Pet Care, Savings, Emergency Fund, Debt Payments

Detailed (30+ categories):

• Same as moderate, plus: Coffee Shops, Alcohol, Fast Food, Home Maintenance, Household Items, Electronics, Books, Fitness, Hobbies, Travel, Parking, Tolls, Haircuts, Dry Cleaning, Kids Activities, School Supplies, Donations

When to Split vs Combine Categories

The eternal budgeting question: should this be its own category?

Create a separate category when:

• You want to budget for it separately - "I want to limit coffee shops to $50/month"
• It's a significant expense - If you spend $200/month on something, track it!
• You want to see trends - "How much am I REALLY spending on subscriptions?"
• It helps with goals - Tracking "Eating Out" separately motivates you to cook more

Combine into broader category when:

• Spending is infrequent - You buy books twice a year? Just use "Entertainment"
• Amount is small - $10/month doesn't need its own category
• Too many categories overwhelm you - If you're avoiding budgeting because it's too complex, simplify!

Editing and Deleting Categories

Your category system will evolve. Here's how to adjust it.

To edit a category:

1. Go to Categories
2. Click on the category you want to edit
3. Click Edit
4. Make your changes (rename, change group, etc.)
5. Click Save Changes

To delete a category:

1. Open the category
2. Click Delete
3. Choose what to do with existing transactions in this category
4. Confirm the deletion

Special Categories

A few categories deserve special mention.

Savings:

When you transfer money to savings, it's not an expense - it's a transfer. But you can create a "Savings" category for budgeting purposes. Budget $500 for savings, then transfer that amount to your savings account each month.

Debt Payments:

Create separate categories for each debt if you want to track them individually: "Student Loan Payment", "Car Loan Payment", "Credit Card Payment". Or use one "Debt Payments" category for all of them.

Gifts:

One "Gifts" category works for most people. But if you want to separate "Birthday Gifts", "Holiday Gifts", and "Wedding Gifts", you can!

Uncategorized:

HOB provides an "Uncategorized" category for transactions you haven't categorized yet. Don't use this permanently - it defeats the purpose of budgeting! Always assign a real category.

Quick Tips

• 💪 Start simple: 10-15 categories is plenty for most people
• 🎯 Make it personal: Your categories should match YOUR life
• ➕ Add as needed: Don't create categories "just in case"
• 🔄 Review quarterly: Every few months, evaluate if your categories still make sense
• 📊 Budget-worthy = category-worthy: If you'd budget for it separately, make it a category
• 🗑️ Don't fear deletion: Merge or delete categories that aren't serving you

Next Steps

Now that your categories are set up:

• Adding Transactions - Start categorizing your spending
• Budget Basics - Use your categories to create a budget
• Using Reports - See spending breakdowns by category