Cake Budget
how-to beginner 3 minutes

How to Create and Use Custom Categories

Create personalized transaction labels that fit your unique spending patterns

Last updated: November 1, 2025

Custom Categories in Cake Budget allow you to create personalized transaction labels that fit your unique spending patterns. While Plaid automatically assigns categories to your bank transactions, custom categories give you complete control over how you organize and track your finances.

What You’ll Accomplish

By the end of this guide, you’ll have created custom categories and know how to use them with transactions and automation rules.

Prerequisites

  • ✅ A Cake Budget account
  • ✅ At least one bank account connected (recommended)

When to Use Custom Categories

Custom categories are ideal for:

  • Personalized Tracking: Create categories that match your lifestyle (e.g., “Date Nights”, “Side Hustle”, “Pet Care”)
  • Better Insights: Group related expenses scattered across multiple default categories
  • Automated Organization: Use custom categories in Rules for automatic transaction assignment
  • Specific Goals: Track spending aligned with your unique financial objectives

Step-by-Step: Create a Custom Category

1. Navigate to Settings

Open the sidebar and click Settings, then scroll to the Custom Categories section.

2. Add Category

Click the ”+ Add Category” button to open the creation modal.

3. Configure Your Category

  1. Name: Enter a descriptive category name (e.g., “Coffee Shops”, “Gym Membership”)
  2. Icon (Optional): Select an icon from the picker or skip to auto-assign
  3. Save: Click “Create Category”

Icon Selection Options

Automatic Assignment (Recommended for Speed)

  • Simply enter the category name and save
  • Cake Budget intelligently assigns a relevant icon based on the name
  • Example: “Groceries” gets a shopping cart icon automatically

Manual Selection (Recommended for Customization)

  • Browse 60+ curated budget-relevant icons
  • Organized by category: Shopping, Food, Transportation, Health, Entertainment, Finance, and more
  • Click to select and personalize your category

Managing Categories

Editing a Category

  1. Find the category in Settings → Custom Categories
  2. Click the Edit button (pencil icon)
  3. Update the name and/or icon
  4. Click Save Changes

Note: Changes apply everywhere - past transactions, reports, and rules update immediately.

Deleting a Category

  1. Find the category in Settings → Custom Categories
  2. Click the Delete button (trash icon)
  3. Confirm deletion in the modal

Important: Categories in use by transactions cannot be deleted. Reassign those transactions first, or simply rename the existing category.

Using Custom Categories

Manual Assignment

  1. Go to any transaction in your Transactions list
  2. Click Edit
  3. Select your custom category from the dropdown
  4. Save changes

Automated Assignment with Rules

  1. Navigate to Settings → Rules
  2. Create or edit a rule
  3. Add an “Assign Category” action
  4. Select your custom category
  5. Future matching transactions get categorized automatically

Example Rule:

  • Condition: Description contains “Starbucks”
  • Action: Assign category “Coffee Shops”

Viewing Category Data

Custom categories appear throughout Cake Budget:

  • Transactions Table: Icon and name displayed for each transaction
  • Financial Insights: AI analysis includes spending by custom category
  • Filters: Filter transactions by custom category

Best Practices

Start Small

Begin with 3-5 categories for your biggest tracking needs. Add more as you discover spending patterns.

Combine with Slices

  • Categories track what you spent money on
  • Slices track budget allocations
  • Use both together for powerful insights

Example:

  • Create “Dining Out” slice with $300 monthly budget
  • Create custom categories: “Coffee Shops”, “Restaurants”, “Fast Food”
  • See both “Am I on budget?” (Slice) and “Where is my money going?” (Categories)

Use with Rules for Automation

  1. Create categories for frequent spending types
  2. Set up rules to auto-assign those categories
  3. Transactions categorize automatically going forward
  4. Less manual work, more actionable insights

Regular Review

Every few months:

  • Delete unused categories
  • Consolidate similar categories
  • Create new ones for emerging spending patterns

Real-World Examples

Example 1: Freelancers & Side Hustles

Scenario: Track business expenses separately for tax time.

Custom Categories to Create:

  • “Business Travel”
  • “Office Supplies”
  • “Software Subscriptions”
  • “Client Meals”

Result: Easily filter and export business expenses at tax time without manually sorting through mixed transactions.

Example 2: Parents & Families

Scenario: Track child-related expenses across multiple default categories.

Custom Categories to Create:

  • “Childcare”
  • “Kids Activities”
  • “School Expenses”
  • “Kids Clothing”

Result: See total child-related spending regardless of whether Plaid categorized it as “Education,” “Clothing,” or “Recreation.”

Example 3: Health & Wellness

Scenario: Group health spending for HSA/FSA tracking.

Custom Categories to Create:

  • “Gym & Fitness”
  • “Therapy & Mental Health”
  • “Supplements & Vitamins”
  • “Medical Co-pays”

Result: Track all health spending in one view, including expenses that fall outside traditional “Healthcare” categories.

Example 4: Hobby Tracking

Scenario: Monitor specific hobby spending to stay within your fun money budget.

Custom Categories to Create:

  • “Photography Gear”
  • “Woodworking Supplies”
  • “Gaming”
  • “Gardening”

Result: Know exactly how much you’re spending on each hobby without mixing them into generic “Shopping” categories.

Pro Tips

💡 Start with 3-5 Categories: Create categories for your most frequent or important spending types first. You can always add more later.

💡 Let the AI Pick Icons: The automatic icon assignment is surprisingly good. Save time by skipping manual selection unless you have a strong preference.

💡 Use with Rules for Automation: After creating categories, set up automation rules to auto-assign them to matching transactions.

💡 Combine with Slices: Categories track what you spent money on; Slices track budget allocations. Use both for powerful insights.

💡 Review Your First Month: Look at your transactions after 30 days to see patterns that default categories don’t capture.

💡 Regular Cleanup: Every few months, delete unused categories and consolidate similar ones to keep your system lean.

Troubleshooting

Q: What’s the difference between custom categories and Plaid categories? A: Plaid categories are automatically assigned by your bank. Custom categories are ones you create for personalized organization. You can override Plaid categories on any transaction.

Q: Can I use custom categories in Rules? A: Yes! Custom categories work seamlessly with the Rules engine for automated categorization.

Q: How many custom categories can I create? A: No hard limit, but we recommend 10-20 categories. Too many makes it harder to find spending patterns.

Q: Will changing a category name affect past transactions? A: Yes, editing updates it everywhere—past transactions, insights, and reports all show the new name/icon immediately.

Q: Can I share custom categories with family members? A: Categories are currently user-specific. Full sharing is on our roadmap for Family tier users.

Q: What happens if I delete a category? A: You can’t delete categories assigned to transactions. Reassign those transactions first, or rename the category instead.

Q: Can I change the icon later? A: Yes! Click “Edit” and select a new icon. Changes apply immediately to all transactions using that category.

Q: Do custom categories affect my Slices? A: No, they’re independent. Transactions can have both a Slice (budget) and Category (classification) for maximum flexibility.

Q: What if I misspell a category name? A: Simply edit the category to fix the spelling. All transactions using that category update automatically.

Q: Can I delete categories in bulk? A: Not currently. You need to delete them one at a time, and only if they’re not assigned to any transactions.

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