Knowing what categories your transactions fall into is important for several reasons:
Budgeting: Categorising your transactions can help you create a budget by providing insights into your spending habits. By understanding where your money is going, you can make informed decisions about where to cut back or allocate more funds.
Tracking expenses: Categorising your transactions can help you keep track of your expenses more easily. It can also help you identify any unusual or fraudulent charges on your accounts.
Tax preparation: Categorising your transactions can make it easier to prepare for tax season by providing a clear record of deductible expenses. This can help you save time and ensure that you don't miss out on any potential tax deductions.
Financial planning: Categorising your transactions can help you gain a better understanding of your overall financial picture. This can be especially useful when planning for major financial goals, such as buying a home or saving for retirement.
Overall, categorising your transactions can help you gain greater control over your finances and make more informed decisions about how to manage your money. It can also help you stay on track with your financial goals and ensure that you are making the most of your resources.