Managing Categories and Subcategories

Quick Review

• What: Organize transactions using categories and up to two subcategory levels

• Why: Understand spending patterns and simplify tax preparation

• How: Settings > Categories & tags > + Category button

• Note: Some system categories (Transfer, Credit Card Payment) cannot be edited/deleted

Overview

Categories in Quicken Simplifi help you understand where your money goes. While Simplifi automatically assigns categories using crowdsourcing and logic, customizing categories to match your life makes financial tracking more meaningful and accurate.

Ashley initially went overboard creating 40+ categories, thinking more detail would help with taxes. After a month of tedious categorization, they realized most categories went unused. They streamlined to about 20 well-chosen categories that match their actual tax needs and spending patterns. Now their quarterly tax prep is efficient without the daily categorization being a burden.

Understanding Category Structure

Simplifi supports three levels of organization:

1. Main Category (Example: Loans)

2. First Subcategory (Example: Loan Payment)

3. Second Subcategory (Example: Loan Interest)

Each category must be designated as:

• Income or Expense (Note: You cannot have both income and expense subcategories under one main category)

• Personal or Business

Viewing Your Categories

To see all available categories:

1. Hover over the left panel and select Settings

2. Select Categories & tags

Here you'll find default categories plus any custom ones you've created.

Creating Categories and Subcategories

From Settings Menu

1. Navigate to Settings > Categories & tags

2. Click the blue + Category button

3. Enter the category name

4. For subcategories:

   • Click Subcategory Of field

   • Select the parent category

5. For main categories:

   • Select Expense or Income

   • Select Personal or Business

6. For tax tracking:

   • Click Tax Info

   • Toggle Tax Related on

   • Select tax form and line item

   • Click Update

7. Click Create

From a Transaction (Faster Method)

1. In any transaction's Category field, type the new category name

2. Hover over Create when it appears

3. Select Main Category or Subcategory of

4. Choose Business or Personal

5. If subcategory, select the parent category

Ashley prefers creating categories while categorizing transactions—it's faster and ensures categories match real-world needs.

Editing Categories

Most categories can be edited, except system categories:

• Transfer

• Credit Card Payment

• Balance Adjustment

• Investment

To edit:

1. Go to Settings > Categories & tags

2. Hover over the category

3. Click the three dots

4. Click Edit

5. Make changes

6. Click Update

Common edits:

• Renaming for clarity

• Changing tax settings

• Moving between Personal/Business

Deleting Categories

The same system categories that can't be edited also can't be deleted. For all others:

1. Go to Settings > Categories & tags

2. Hover over the category

3. Click the three dots

4. Click Delete

5. Click Delete again to confirm

Important: If the category is being used on a transaction, Simplifi will ask you to select a new category for the affected transactions. Once selected, click Reassign & Delete.

Best Practices

1. Start simple: Don't create too many categories at once

2. Use descriptive names: "Client Meals" is clearer than just "Meals"

3. Be consistent: Use the same category for similar transactions

4. Think about your needs: Create categories that match how you think about money

5. Remember the limits: Only three levels deep (main > sub > sub)

Common Mistakes to Avoid

• Over-categorizing: Too many categories make selection tedious

• Vague names: "Miscellaneous" tells you nothing later

• Forgetting tax settings: Mark business categories as tax-related immediately

• Income as expense: Ensure refunds use income categories

Category Strategy Tips

For taxes: Create subcategories matching your tax form line items

For budgeting: Keep personal categories broader for easier planning

For analysis: Use subcategories for areas you want to monitor closely

Ashley's rule: "If I won't look at it separately in reports, it doesn't need its own category."

The Bottom Line

Well-organized categories transform Quicken Simplifi from a transaction list into a powerful financial tool. Take time to build a category structure that matches your life, whether that's detailed business tracking or simple personal budgeting. Remember you can always adjust as your needs change.

Hint: Before creating elaborate category structures, use Simplifi for a month with mostly default categories. Ashley learned that their initial 40+ category system was overwhelming. After a month, they identified which spending areas they actually wanted to track separately and rebuilt with just 20 well-chosen categories. Start simple and add complexity only where it provides value for your specific financial goals.