Understanding Monarch Money Tags with Taylor, Financial Coach
As a financial coach, I help my clients create cash flow systems to save more money, pay off debt, and budget successfully. I primarily use Monarch Money and would like to demonstrate how to utilize the tagging feature to achieve better results.
Purpose of Tags
Tags are small dots within Monarch Money that provide additional details to specific transactions, making them more functional than notes. They allow you to run reports and compile data within one category, reducing the number of unnecessary categories in your budget.
Benefits of Using Tags
Using tags has several advantages, including:
- Reducing the number of categories: By using tags, you can avoid creating categories for one-off transactions, such as a wedding or a family reunion, which are not frequent or essential.
- Compiling data: Tags enable you to gather data from multiple transactions within a specific category and run reports to analyze the information.
- Improving budget functionality: With tags, you can create broad, yearly, or monthly categories and use tags to drill down into more specific details.
Common Tag Examples
Some common tag examples include:
- Tax: For syncing funds, categories, or financial transactions related to taxes.
- Travel: For transactions related to trips, vacations, or business travel.
- Home Improvement: For expenses related to maintaining or upgrading your home.
- Holidays: For transactions related to special occasions, such as birthdays, anniversaries, or holidays.
- Special Occasions: For transactions related to unique events, like weddings, graduations, or family reunions.
Using Tags for Reports
Tags are helpful for running reports on one-off situations, such as travel. For example, creating a spend report on a specific vacation. Instead of categorizing transactions under "Travel" or "Vacation", categorize each transaction under its true category (e.g. restaurants, entertainment, etc.) and then tag them to group them together.
The benefits of tagging include:
- Allowing for more detailed reports on specific topics, such as a vacation
- Providing a comprehensive view of expenses, including various subtopics (e.g. restaurants, entertainment, etc.)
- Enabling tracking of change over time for specific categories (e.g. Home Improvement)
Example: Home Improvement Reports
You can run a report on Home Improvement expenses to get an idea of spending patterns. Look for changes over time and identify big spikes. Tag different projects to break down Home Improvement expenses into subtopics (e.g. kitchen renovation, backyard renovation, etc.). This allows for more detailed analysis and reporting on specific projects within the Home Improvement category.
Tags in Budgeting: A Detailed Explanation
Using Tags for Budgeting
Tags allow you to categorize transactions in a more detailed way, enabling you to track specific expenses within a larger category. For example, you can create a Home Improvement category and use tags like "backyard" and "basement" to track expenses for each area separately. This helps you stay on track with your budget and make adjustments as needed.
Applying Tags
To apply a tag, click on a transaction and then click on the "Tags" button. You can add multiple tags to a single transaction by separating them with commas. Hovering over a tag will allow you to see all the transactions associated with that tag.
Managing Tags
To edit tags, go to the "Settings" menu and scroll down to the "Tags" section. From here, you can rename, change the color, or delete tags. It's recommended to regularly review and edit your tags to ensure they remain relevant and useful.
Common Tag Examples
Some common tag examples include:
- Home Improvement: basement, backyard, kitchen, etc.
- Business expenses: office supplies, travel, equipment, etc.
- Personal expenses: groceries, entertainment, clothing, etc.
Tips and Best Practices
Some tips and best practices for using tags include:
- Using specific and descriptive tags to make it easy to find and track related transactions.
- Avoiding creating unnecessary tags, and regularly reviewing and editing your tags to ensure they remain relevant.
- Using tags to create custom reports and stay on track with your budget.
- Utilizing the "split" icon to divide transactions into multiple categories, if needed.
- Considering deleting tags that are no longer needed, such as the "split" icon or "reimbursements" tag if you are no longer using them.
Creating a Budget for Holidays and Special Occasions
When creating a budget for holidays and special occasions, consider setting aside a certain amount each month for these expenses. You can also create tags to categorize and track specific events, such as birthdays, weddings, and graduations.
Utilizing Tags in Monarch Money
When utilizing tags in Monarch Money, create a broad category for special occasions and use tags to run reports on specific events. Be detailed with tags, but avoid creating redundant or unused categories. For example, instead of creating a category for "kids 13th birthday", use tags for "birthday gift" or "special occasions".
Benefits of Using Tags
The benefits of using tags include:
- Finding data quickly by searching and filtering for tags
- Making budget management easier
Request for Feedback and Participation
I'd love to hear from you! Share your experiences and ideas for using tags in the comments below. Sign up for my newsletter to receive updates on upcoming workshops and discuss best practices for using tags.