Understanding your spending habits is crucial for effective financial management. Categorizing bank transactions provides clarity on where your money goes, enabling better budgeting and forecasting. However, manually sorting through transactions can be tedious and time-consuming. That's where Walletguide steps in, automating the categorization process to save you time and provide valuable insights.
Why categorize bank transactions?
Categorizing your bank transactions helps you:
- Understand spending patterns: Identify where your money is going, allowing you to make informed decisions about your expenses.
- Adjust costs over time: Recognize areas where you can cut back or need to allocate more funds.
- Predict future expenses: Use historical data to forecast future spending, aiding in financial planning.
Walletguide's Forecast feature leverages categorized transactions to provide accurate predictions, helping you plan for upcoming expenses with confidence.
The importance of automation
Manual categorization is often neglected due to its time-consuming nature. Many users start with good intentions but quickly abandon the process. Walletguide addresses this by automating the categorization of over 70% of your bank transactions without any user input. If you choose to correct or manually categorize transactions, Walletguide learns from these adjustments to improve future categorizations.
Understanding the role of merchants
Identifying the merchant behind a transaction is key to accurate categorization. Walletguide focuses on determining the merchant first, as this information often indicates the transaction's category. Once the merchant is identified, Walletguide analyzes existing transactions associated with that merchant to assign the appropriate category. Merchants are automatically created within the system during this process.
How Walletguide detects merchants
Walletguide employs several methods to identify merchants:
- Brand recognition: Utilizes a global brand database to instantly recognize familiar merchant names.
- Location-based identification: Uses services like Google Maps to pinpoint the exact location of the transaction.
- Legal name enrichment: Enhances legal entity names with contextual data via web search APIs, such as Bing Web Search, for accurate matching.
Leveraging AI for categorization
After identifying the merchant, Walletguide uses AI models, like Gemini Flash, to determine the transaction's cost category. The AI considers various artifacts, such as Google Place information and company metadata, to make accurate categorizations. By mapping these details to a predefined list of categories specific to each user, Walletguide ensures personalized and precise categorization.
Achieving high coverage and quality
In tests with various day-to-day bank accounts, Walletguide successfully identified merchants and categorized transactions in over 70% of cases. While coverage may vary depending on your specific transactions, Walletguide continuously improves its algorithms to enhance both coverage and categorization quality.
Tracking total values only
For users interested in a high-level financial overview, Walletguide offers the ability to only track total values of assets. This feature allows you to monitor your net worth effortlessly without spending any time on individual bank transactions. But even if you prefer a broader view, having detailed information about your daily bank accounts can provide additional insights. Walletguide seamlessly combines high-level tracking with detailed analysis where necessary.
Summary
Walletguide harnesses the power of AI to automate the categorization of your bank transactions, providing you with valuable financial insights without the manual effort. By identifying merchants and assigning categories accurately, Walletguide helps you understand your spending habits, adjust costs, and plan for the future. Whether you're an entrepreneur or someone with an entrepreneurial mindset, Walletguide offers a comprehensive solution for managing your personal finances.