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What is a Budget or Spending Category?

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To select the categories for your budget, click on the Choose Categories button in Quicken.

Choosing Income and Expense Categories in Quicken

Intuit / Screen Shot by Shelley Elmblad
Definition: 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.

Examples:
I set up budget categories in Mint.com to track my spending of job-related expenses, auto expenses and household expenses.
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