Concepts
Categories, budgets, and tags in finance
Bookkeeping is only useful if you can answer “where does my money go?”. Grouping transactions is how you get that answer. Pledger.io gives you three complementary ways to organize a transaction: a category, a budget, and tags.
Categories — what kind of spending it was
A category describes the nature of a transaction: groceries, salary, rent, public transport. Every transaction can have exactly one category, and categories are where most of your “what do I spend money on” analysis happens.
In double-entry bookkeeping terms, categories group the opposing accounts: all your grocery payments share the “Groceries” context even if the store accounts differ.
Budgets — how much you planned to spend
A budget is a spending plan for a period. Where categories describe the type of expense, budgets describe the limit you set for a group of expenses. A transaction can belong to at most one budget expense group.
Think of categories as the buckets that hold your transactions, and budgets as the rules that govern how much should go into each bucket.
Tags — free-form labels
Tags are flexible labels you attach to a transaction. A transaction can have as many tags as you like, and tags do not need to be defined upfront.
Use tags for cross-cutting concerns that do not fit one category,
for example holiday-2026, tax-deductible, or shared-with-partner.
How they work together
| How many per transaction | Answers | |
|---|---|---|
| Category | one | What kind of expense or income was this? |
| Budget | one | Am I within the limit I set for this group? |
| Tag | many | What else do I want to remember about this? |
Transaction rules can assign categories, budgets, and tags automatically when transactions are created or imported.