Wallets and categories: where the money is, and what it went on
Many people who start tracking create a wallet for everything: one for food, one for transport, one for the children. A few weeks later they are moving money between wallets that do not exist in real life, and the picture they wanted is gone. A wallet and a category answer two different questions, and neither can stand in for the other.
The rule in one line
A wallet answers "where is the money right now?" A category answers "what did I spend it on?"
A wallet is a real place money sits, with a balance you can count or look up: the cash in your pocket, your bank account, a debit card, a mobile wallet. A category describes a purchase: food, transport, bills, clothes. Every purchase leaves exactly one wallet and belongs to exactly one category.
When to create a new wallet
Create one when at least one of these is true:
- The money really is somewhere separate: a second bank account, a mobile wallet, or cash kept at home apart from the cash you carry.
- The money is in a different currency: a dollar account, or cash for a country you are visiting.
- You want to know that place's balance and check it against reality, for example counting the cash at the end of the month and finding it matches the app.
If none of these applies, you do not need a wallet.
When a category is enough
When you want to know how much went on something, that is a category's job. "How much did we spend on food this month?" is a question about a category; it does not need a food wallet. And if you want a limit on that spending, the limit belongs on the category, not on a wallet.
Examples from home
| Situation | Better fit | Why |
|---|---|---|
| Salary in the bank, cash withdrawn from it | Two wallets: bank and cash | Two real places, each with a balance |
| You want to know what the children cost | A category | A question about spending, not about where money is |
| Housekeeping cash kept in its own envelope | A wallet | The money is truly separate and you can count it |
| You hold a dollar account | A dollar wallet | A different currency |
| You want a monthly cap on eating out | A category with a monthly cap | The limit is on spending, not on a place |
The most common mistake
A wallet for every kind of spending. It looks tidy on day one, then forces you to "transfer" money from the salary wallet to the food wallet before each purchase, although nothing moved in real life. The balances stop matching anything, and the one thing a wallet is for, a balance that matches reality, is lost. What you wanted to know, how much went on food, a category gives you with no transfers at all.
What this looks like in Masareefy
Masareefy's wallet types are bank account, cash, card and mobile wallet. Each wallet has one currency, chosen when it is created and never changed. The app connects to no bank, so a wallet's balance is what you state, and you can check it against reality whenever you like. A transfer between two wallets counts as neither spending nor income. See multi-currency wallets.
Categories come ready-made, and you can add your own and hide the ones you do not use. To put a limit on a category, create a goal of the monthly category cap type; it shows what you spent there against the cap. Creating wallets, transfers and goals are part of Premium; recording into a wallet you already have is always available.
Questions people ask
Do I need a wallet for a debit card linked to my bank account?
Usually not. The card draws on the same account, so there is one balance. Give the card its own wallet only if it holds a separate balance.
I want household spending apart from my personal spending. Two wallets?
If the household money is genuinely kept somewhere else, an account or an envelope, yes. If it all sits in one place, use categories.
How many wallets does a household usually need?
Two or three: the bank account, cash, perhaps a mobile wallet. The right number is the number of places your money actually is.
Set up one Masareefy wallet for each place your money really is, and let categories tell you what it went on.
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