Categories are at the center of any financial software or personal finance web application that offers strong reporting and budgeting capabilities. Categories are used to classify and sort income
and expense dollars so the software user can make this data meaningful to the user through reports and graphs.
Keeping a budget in financial software would be impossible without setting up categories first. A few samples of categories are Groceries, Utilities/Cable, and Net Income.
I set up budget categories in Mint.com
to track my spending of job-related expenses, auto expenses and household expenses.