Published on May 1, 2019 9:33 pm, by Pete Lalor
It’s hard to provide specific guidance on how to reduce spending in this category. Chances are it’s mostly cash withdrawals that you’ve then spent on things that belong in other categories. To get real insights into this spending you will need to know what it is. To know what it is you’ll either need to categorise it more specifically yourself (which might require splitting transactions) or you’ll need to switch to some kind of electronic payment mechanism like a debit card or credit card.
So, in this article we are going to concentrate on:
Checking your transaction categorisation
A lot of your spending analysis depends on having transactions categorised correctly. We use a combination of sophisticated technology to analyse transaction data and automatically assign categories. We work hard to maintain this technology to make sure transactions are categorised completely and accurately. Sometimes the technology won’t get it right and you’ll have Uncategorised transactions or transactions that are incorrectly categorised.
You’ll see Uncategorised transactions quickly and easily in the Uncategorised Transactions tile on the Overview dashboard tab. You can help teach the system how to categorise these transactions by manually categorising them.
It’s probably easiest to find any incorrectly categorised transactions by reviewing your Spending Reports and spotting any anomalies or by regularly reviewing your transactions on the Transactions screen in the MoneyBrilliant app. If you find a transaction that is incorrectly categorised, tap on it, then tap on the category name and then either select a suggested category, search for a category or browse through the list of categories displayed. If there are other categories like this one in your transaction history you’ll also be prompted to change the other transactions. Similar transactions from now on should also be categorised the same way.
In the case of transactions categorised as Other & ATM you can apply a filter the transaction screen to just view these transactions and then recategorise any transactions that aren’t categorised correctly.
Creating your own sub-categories
We provide a comprehensive set of standard categories and sub-categories in the app. But sometimes these aren’t enough or don’t quite suit. To cater for this scenario you can create your own custom sub-categories. Unfortunately, you can’t create your own Categories but you can create your own custom sub-categories using the browser version of MoneyBrilliant.
Splitting transactions to help with categorisation
Sometimes you’ll have a single transaction that really needs to be split and allocated across two or more categories. This happens most with cash or ATM withdrawals. Whilst it’s a bit tedious to do it, you can basically replace a single transaction with multiple transactions that add up to the same value and assign each of the new transactions a different category. It’s a bit tedious, but if you have a lot of large cash withdrawals and you want the most accurate view of your spending it can be done.
Reducing cash transactions by using a debit card or a credit card
First up, we need to say that we have no particular love of credit cards and certainly no particular credit card. However, if they are used responsibly and sensibly they can be very convenient, provide a useful source of cheap, short term credit and help with the tracking and analysis of your spending. The downsides are they can be expensive (annual fees, transaction fees, transaction surcharges) and if you don’t pay them off on time they can be a very expensive source of credit.
Debit cards are less dangerous, offer many of the benefits of a credit card, but obviously don’t provide credit. That is you have to have the money in your account when you spend it. Given we really want people to pay their credit cards off each month this shouldn’t be a significant problem.
So, if you want to track and analyse your spending without having to manually split and categorise your transactions find yourself a credit card or a debit card. If it’s a debit card you are after, it’s probably easiest to get one from your main financial institution. If its a credit card you are after we suggest you find one with the best combination of annual fees (some cards have no annual fee), purchase interest rate (some cards are as low as 9% and some are as high as 24%), cash advance interest rate (some cards are as low as 9% and some are as high as 24%), foreign currency conversion fees (some cards have no foreign currency conversion fees) and other transaction fees.
You can see which cards are found to be the cheapest cards for other MoneyBrilliant customers here. Keep in mind that this analysis is based on their particular transactions and these are likely to be different from yours, so the costs may be different.
Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.