When we don't have detailed control of our finances, it is very common to wonder "Where is my money going?" or even, "Where does this money come from?".
Dividing your transactions by categories is a simple way to identify how your money has been spent and what is the origin of your income. This is one of the first steps to have better financial control because this is what allows you to know what areas of your life have been moving the most money.
By doing this, you have a clear vision of what is good and what is bad for your economies.
Categories are defined between income types and expense types. It's a simple way to identify how your money has been spent and also to know the source of your incomes.
What are the differences between the categories of expenses and incomes?
Categorizing expenses. This allows you to identify how much per month you spend on food, leisure, housing, studies, transportation, travel and other categories and thus finding points where you can save money.
Categorizing incomes. This allows you to identify how much per month you earn with salary, commissions, gifts and other sources of income that you may have and thus plan how you can raise your incomes.