What Categories Do You Need In A Budgeting App? Demonstrated With Monarch Money
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- เผยแพร่เมื่อ 1 มิ.ย. 2024
- Here is how I have been helping my financial coaching clients set up their categories in Monarch Money (or any budgeting app, really!). This is UNSPONSORED.
Please let me know what questions you have! I am more than happy to make videos more in depth on any budgeting topics.
0:00 Intro
0:49 Why Create A Category?
4:30 Common Ways People Categorize Expenses
6:25 Recommend Category Grouping
8:05 Step-By-Step Monarch Tutorial For Categories
11:30 Disable/Delete Categories & Groups
15:15 Categories To Focus On During The Month
16:06 Categories You Do Not Need & Tagging
17:20 Categories For Couples
The fewer categories you have, the less you have to monitor and keep track of. If you have one category for all food, Monarch will likely be able to properly categories all food related expenses on it's own. But, if you have many food related categories like Fast Food, Restaurants, Date Nights, Work Meals, Meals With Friends, etc, then you will always need to be changing categories manually which means more work for you!
Be deliberate with categories. Pretend I am asking you "do you really need that category to track that?".
SIGN UP FOR MONARCH MONEY: You can get an extended 30-day free trial of this budgeting app through my referral link in the comments below (I do receive 1 month credit on the app if you sign up through this link): www.monarchmoney.com/referral...
To learn more about my services, be sure check out my website and sign up for the newsletter here ➡️ www.evolvingmoneycoaching.com/
Let's connect on Instagram @evolvingmoney
/ evolvingmoney
Linkedin / taylor-westergard
I just found your channel today! This was so helpful! I just started using Monarch and I’m so lost. Hope you keep making more videos!❤
Brilliant. So well done. Many thanks!
Thank you! So glad you liked the video!
Thanks for this video. I used tags and categories in Mint for the past 10 years. (RIP) Started using Monarch yesterday. and it's great to know they have such customizable options! 🙏🏾
I hope you find Monarch to be an upgrade once you get through the set up!
Super helpful! Thank you!
Glad you found it helpful!
Hi Coach Taylor, this makes so much more sense intuitively to set up the categories this way. I can’t believe how much easier Monarch has been vs YNAB (on and off again user for 5 yrs). I’ve been able to make behavioral changes that I wasn’t able to with YNAB. Game changer using Monarch and working with you! Highly recommend! I came to this channel searching for budgeting apps.
I am so glad you found it all so helpful! That is amazing that you've noticed those changes already!! Good luck with all your budgeting efforts! (:
Very helpful, thanks! I had wayy to many categories. Less is more for sure.
It happens! It will definitely be easier to manage with less categories. Glad you found it helpful!
This is precisely what I was looking for, used categories extensively in Mint, even for taxes, I just subscribed and want to see all updates videos because you made this outstanding video
Thank you! Hope you keep finding them helpful. Let me know if there are any videos you'd want me to make in the future!
Another member of the Great Mint to Monarch Migration here, and I'm glad my fiance and I found your video. I'm a tech professional and all around data guy, and she is not. So finding a way to categorize Monarch transaction that made sense for both of us was critical. This video really helped us find a starting point that's so much simpler. We feel so much less stress about organizing transactions now. Thank you so much for the time and energy you put into this. Looking forward to viewing more of your videos.
Question: How might you configure "private stash" money? I'd like to buy her flowers, for example, without that transaction or the moving of money to buy them blow my cover. She loves getting little gifts for me, too. My initial thought was to take our "personal" credit cards (one each) out of the Monarch loop, and budget a small amount of money to each every month. Even if I decided to buy something big like a camera or something for hundreds of dollars, I could use the monthly budget to pay down the credit card balance for that purchase. Thoughts?
I am glad you are enjoying the videos!! Thank you! Sorry for the delayed replies, been on a vacation (:
To answer your questions, yes that would be a great solution and you would just make the credit card payment from the personal use disconnected cards as maybe "personal expenses" or something. My partner and I do the same thing, but we send a fixed amount to each others personal checking accounts to do whatever we wish and the personal accounts are not connected to Monarch Money so we mark the transfers to those personal accounts as each persons personal expenses.
Hello Coach Taylor and Thank YOU for the Monarch series. I started using Monarch Oct'23 to get better visibility into my finances before retirement. I tried several and this is the best for me who needs financial insight more than discipline. I like how my Visa charges flow in automatically to be individually categorized. I need you advice on how to make Monarch remind me of a missed Visa payment on the recurring calendar. It would be great if possible if I could trigger a color change. Keep up the good work!
I am so glad you are finding Monarch to be helpful with your budget! I agree, it would be nice if it changed to like a red color if it doesn't see the transaction coming through. I know it will turn yellow though if the charge hasn't come through. As for notifications, there is one you can turn on that will warn you something is coming due 3 days in advance, but not if it is late. I highly recommend putting credit card payment on auto-pay for the full statement balance so you never miss a payment! (: Good luck!
Thank you so much for these great videos! I'm just starting with MM and setting up categories. Is the "savings categories" the same as "sinking funds" ?
Yes they are! Sorry for the confusion!
HELLO Taylor! Great video BUT, please create one specifically for retirees who use Monarch. Someone who has Traditional IRA/401ks (pre and post RMD eligible), Brokerage accounts, Roth IRAs, Medicare, Social Security recipients, HSA holders, Medical Stipend beneficiaries, etc. Your tutorial kind of relates in some ways to reimbursements as you show in other tutorials, but they are definitely. more focused on pre-retired folks, which is great! But post-retirement is a bit different, and it would help to just give some guidance on that too. Also, more on tags and how useful they are within categories would be great too. Thank you!
You got it! I'd love to do that. I've added it to the list. Thank you for the suggestions!
Yes! This is how i like to budget too. Thanks for sharing! Would you be okay if I reference your channel in my upcoming video on monarch money?
I'd love that! Please do! Thank you!
All of your videos have been super helpful! Do you know if there's an easy way to budget existing account balances in Monarch? Eg. my starting point in Monarch is January 1st, and I get paid on the 15th/last day of the month. There's no option to assign existing money to my January categories since I haven't yet received income, so my "left to budget" is negative and I have money sitting in my checking/savings that I can't assign. For reference, I'm coming from YNAB and would love to switch to Monarch but am finding some of the functionality missing currently. :(
Thanks for all time and effort you put into these tutorials!
If you turn on the Rollover feature by clicking on the gear icon next to the category, you can set a "starting balance" for that category. Monarch budgeting is designed right now to be a planner for inflow and outflows which means when you use existing savings, it will be negative (which is true, because you are pulling from savings).
Yes Mint shutting its doors has forced me to make a change... and I really like Monarch so far. I am totally loving your structure of categories. A real paradigm shift for sure. As a family (6 total) we (which means me) struggle with tracking the myriad of expenses. One big area is Amazon. Much like Target (the store) spending but even bigger, so many categories get buried together with all these Amazon purchases. Any advice on how to split/track these numerous expenses? P.S. I was a Mint user for over 12 years and it was great tracking the expense but I did not use it well to budget. Ugh. Thanks!!
A lot of my clients do just set up a category called "Amazon" and "Target". I don't recommend this if it can be avoided. There is a way to Split in Monarch so if you have a $100 amazon purchase you can Split it and categorize $50 into Pet expenses and $50 into clothing or whatever and you can split one transaction several times.
If you stay consistent with your Monarch and check in every few days it is easier to remember what you bought in Amazon so that you can properly categorize in Monarch. If you wait to review your transactions until once or twice a month, it will take soooo much time depending on how many there are. I recommend jumping into your budget daily to try your best to categorize what you can and if you can't remember just put it into "shopping" as a place holder.
@@evolvingmoney I'm the same way. We make a ton of purchases from Amazon. You just have to look at the budget every couple days so you can really remember what each 54.23 purchase was made for.
Your videos have been such a lifesaver! i appreciate the clarification of needing a category vs just creating a tag. You mentioned wedding as a tag in your scenario but if you are trying to budget, would creating a sinking fund make more sense?
Thank you!! I am so glad you are liking the videos! I would create a goal to help start saving for wedding or one-time purchases. You can create a sinking fund, but I wouldn't create a category in Monarch labelled wedding or else it would be a completely useless category after the fact. Using a tag is less in the way than a useless category!
@@evolvingmoney Thank you so much for your quick response! If I already have the money saved but just want to track it against it, would tagging be the right tool to make sure i'm within my wedding budget?
@adelephante-xc2zz yes! Tagging is great and you can use the reports to see how much you've spent in a tag by filtering to see only expenses related to that tag! I actually have a video tomorrow about the reports section for that
Your videos are so informative - thank you! I watched the Sinking Fund videos before this, which was very eye opening, but I'm stuck on how to categorize something like Restaurants which can be an expense for multiple categories. Aside from a dinner with friends, it could also be a birthday party or an every-night expense while on vacation. I'm having trouble deciding on how to categorize these depending on the occasion. For example, if I'm eating out on vacation I would think that it should be part of my sinking fund since it would add up, but if i categorize it as that then my restaurant budget is untouched and artificially low. Should I keep all restaurant expenses in the respective category but use tags for the occasion? But then it won't apply to my sinking fund budget. Lol I'm stuck.
Haha! So just because you don't categorize something as a sinking fund category, doesn't mean you can't use the sinking funds for it. I will move money out of the travel sinking fund into my dining out category and I use tags to note that it was for travel related expenses!
Great video!! thanks! How can I monitor spending on, say movie/entertainment if transactions fall into two different categories? For instance, Netflix falls under fixed expenses, while going out to the movies would fall into variable expenses?
You could use tags in this instance. You could tag Netflix as entertainment and then you can use the reporting features and filter for just your entertainment tag and entertainment category!
@@evolvingmoney great idea! Thank you so much!!
Love the content. Question: I budget for sending money to various savings and it technically affects my cash flow. I sent it to College Fund, 3-6 month savings, Vehicle/Vacation Fund etc. How do I categorize it so it shows as an expense? Create a new category?
You would want to show savings as Goals. You would want to create a goal and attach savings transfers to those goals. You wouldn't want to categorize them, or else it would show up as an expense in your budget (which is not true, an expense occurs when funds leave your control). Savings should very rarely be categorized other than transfers.
Update: I found how to move money between categories. I decided to transfer the cash accumulating in the savings group, from checking to a money market fund at the end of each month. I subtract any expenses that occurred from the transfer amount so that amt stays in checking to cover for the payments. I keep a small buffer in checking. Sadly, that amt doesn't earn much interest.
This was very helpful and delivered with excellence. You touched on moving some money accumulated over time which was not used, to another category. Could you explain how that's done? Also I'd like to accumulate savings monthly as you recommend, for things like unscheduled car repairs, income taxes, etc. Then, at the of the month, transfer the money out of the Monarch account where it was accumulating and into an interest-bearing money market fund, for example. When an expense occurs, transfer the needed amount out of the MM fund and back into the Monarch account for payment. Can you think of a way to this using Monarch to do this without getting a dislocated shoulder? Many thanks
with your update, it looks like you have a good system! As it sounds like you know, money moving to a sinking fund account will not show up in your budget. Your budget will only show inflow and outflow, not funds moving between savings accounts!
Another great video, Taylor. Nice job! This is precisely what I needed. Based on your recommendations, I just spent the last four hours reworking my categories. The use of tags was huge. I struggled with accounting for those odd, non-occasional expenses. If you get a chance to cover investment transfers, that would be great. I'm trying to figure out how to best categorize transfers to IRAs. Should I organize them under Finance or Savings Categories? Would they be a sub-category Investment or Transfer? Since Savings Categories are all variable expenses with rollovers, I'm thinking my Roth IRA contributions should be: Finance > Transfer (rollover off), yes? Then there are the transfers to my brokerage account, then used to purchase ETFs, CDs, bonds, etc. Would they also be Finance > Transfer? Thank you!
Hey there! I love the dedication to setting your budget up right! I will absolutely do a video on this very soon as it is hard to explain, but your transfer to your retirement funds will only ever be a Transfer and that transfer category cannot be budgeting for in your Budget so it won't go under "Finance Group". The only way you can Budget for savings transfer if it is under the Goals section. Otherwise, that transfer would be an Expense in your cashflow and which would not accurately reflect a correct savings rate.
@@evolvingmoney Good to know, and thank you for your time and effort. From my use of Mint and Monarch, the "Transfer" category, when used in the transfer out account (debit) to the transfer in account (credit), would cancel out and would not reflect as an expense because it's not an expense, I just moved my money from one account to another. Using my beer fridge analogy (you remember that one): I merely moved my beer from house fridge to the garage beer fridge, I haven't drank it yet. I used your Sinking Funds recommendation (now relabeled Savings Categories in my budget) with all my savings sub-categories set to recurring; works great! Those variable expenses added up to $3,000 per month. I transfer those funds into a HYA twice a month, categorized as "Transfer." These $1500 transfers 'do not' show as an expense in my budget. So I'm scratching my head why a transfer to a Roth IRA would be any different than my Savings Categories transfers. I know my Roth transfers would not be set to rollover. I look forward to your video on the subject. Maybe this feedback will help with the content agenda of your video. Best!
@@tjlasonde Haha yes, LOVE the beer analogy. You are exactly correct, I think I might've misunderstood your question before. The moving of fund into retirement accounts will always be labelled as transfer as you move beer from the inside fridge to the garage fridge. Ha! You would not treat your sinking fund transfers any differently.
@@evolvingmoney So we're on the same page on "Transfers" now. The thing about transfers is they don't show up in the Budget. I think I'm stuck using a Goal to account for my Roth IRA contributions. Or, use the Investment category.
Yes, the transfers won't show up in the budget. I recommend using the Goal section to do this because you won't really ever have an expense out of retirement accounts (once you retire, that would be labelled as income.) and I recommended keeping categories for tracking expenses.@@tjlasonde
All the categories in Monarch are great and I'm finding it relatively easy to move 15 years worth of Mint data over. However, what is frustrating for me (and apparently many others if you look at Reddit), is that Monarch doesn't display "Trends" the way Mint did. I was a light user of Mint and mostly used it to track my expenses for tax purposes. I also liked being able to look at my spending in a particular category, or categories, and then make comparisons to years prior. For example, It was so helpful to see how much I spent eating out in restaurants vs grocery shopping from month-to-month, and year-to-year. I cannot find the same function in Monarch and seriously hope they add it. Is there a good place to make suggestions to Monarch? Thanks!
If you go to the Help and Support area in your app, there is a place to provide feature requests! I know it isn't quite the same, but I find the Reporting section in Monarch incredibly helpful to see trends in specific categories in different time periods.
Can you also do a video on how to setup Monarch for small business. My family runs two small service based businesses and we want to track business expenses and budgeting for business as well. Thanks
I would love to! I'll get that out in the next couple of weeks!
@@evolvingmoney In this video can you also include how best to handle a situation where there are both personal and business accounts mixed? I currently have a separate group for business and all the business categories go there but I'm not sure I really like that.
Thank you for your brain power! Question: I created the "Savings Categories" but am unable to move "Travel & Vacation" into this new category. It won't let me even after several attempts. What am I doing wrong? Thank you.
When you creating the "savings categories" is that a group that was made? If so, make sure the Group was made as an expense group and not an income group. Let me know if that makes sense!
How do you split/spread a one-time annual subscription? I have quite a few annual subscriptions (life insurance, Experian, Monarch) and would like to spread that out over 12 months so it doesn't spike my month to month expenses. Thanks!
You really can't...You can budget for it by dividing by 12 for the annual expenses and turning on the rollover feature, but when the subscription hits, there will be a higher expense that month, which is OKAY. No reason to try to manipulate your expenses to show better cash flow. Cash flow will fluctuate month to month. The goal is for quarter to quarter or year to year to trend overall positive.
I am trying to put more deactivated budget categories into my "other" group but it won't let me. Is there a maximum number of categories that can go into one group? Thanks
I have not run into a maximum amount yet! I am surprised it wouldn't let you!
I understand for revolving credit cards the expenses are already considered in the monthly transactions and will affect cash flow that way. But how does 0% interest purchase made on a credit card months prior to monarch get set up since i am paying that card off with a set payment amount each month and NOT adding purchases to that card? Want to include that monthly payment in a way that it affects cash flow each month and budget.
Great question!! As long as the original charge isn't in Monarch, then you would put those 0% interest payments a category. You can create a category or use the Loan Repayment category. For example, Affirm payments would be a category as an expense. Or another example is say you buy furniture at 0% interest. The $1,000 you spent on the couch usually goes on it's own credit card (Synchrony, Affirm, etc). Usually since those are one-time accounts for those big purchases you don't sync them up in Monarch so the original charge isn't in Monarch. The payments would then need to be labelled as an outgoing expense!
I put gas in my fixes expenses too and always add the disclaimer that it's not really 'fixed.' :D
Oh good! Yeah, gas for most people doesn't vary a huge ton unless they are serious road trippers, but then at that point it good be considered a vacation expenses.
currently exploring alternatives to mint! :-[
Jump into Monarch. So many people have told me that Mint shutting down was the best thing that could have happened since it pushed them to find Monarch!!
thank you,@@evolvingmoney! plan to give it a whirl!