Why I Decided to Change My Categories on Personal Capital
Personal finance management apps like Personal Capital have become increasingly popular in recent years, with more people using them to track their expenses, set budgets, and invest their money. However, as users begin to use these apps more frequently, they may find that their initial category selections for their expenses are not the best fit.
In my case, I recently decided to change the categories on my Personal Capital account after noticing that I wasn’t getting a clear view of my expenses. Here’s why I made the change, and how it has helped me better manage my finances.
The Problem with My Initial Categories
When I first set up my Personal Capital account, I used the app’s default categories for my expenses. These categories were broad and general, like “Food and Drink” or “Shopping,” and weren’t specific enough to capture the nuances of my spending habits.
For example, I often order groceries online, and categorizing those expenses under “Food and Drink” didn’t differentiate between groceries and takeout meals. Likewise, lumping all shopping expenses under a single category didn’t allow me to see how much I was spending on clothes versus household items.
The Benefits of Custom Categories
After realizing that my initial categories weren’t giving me the level of detail I needed, I decided to create custom categories tailored to my spending habits. For example, I created a “Groceries” category to track my online grocery orders separately from eating out at restaurants.
I also created specific categories for types of shopping, like “Clothing” and “Household Goods,” so I could see how much I was spending in each area. Creating these custom categories allowed me to get a more accurate picture of my expenses and adjust my budget accordingly.
How to Create Custom Categories in Personal Capital
If you’re interested in creating custom categories in your Personal Capital account, it’s a simple process. First, log in to your account and select the “Transactions” tab. From there, click on the “Categories” dropdown menu and select “Edit Categories.”
You’ll see a list of the default categories, but at the bottom of the page, you can also create your own custom categories. Simply enter the name of the category and select a color to help you easily identify it in your account.
The Importance of Adjusting Categories
Changing your categories may seem like a small adjustment, but it can have a significant impact on your overall financial management. With more specific categories, you can better understand your spending habits and make informed decisions about your budget.
Ultimately, adjusting my categories on Personal Capital has helped me gain clarity over my expenses and given me greater control over my finances. I would encourage anyone using personal finance management apps to evaluate their categories and consider making changes if necessary. It may take some time to fine-tune your categories, but the rewards are worth it in the long run.
