After making the switch to Moneydance at the beginning of 2010 I discovered a useful feature of the software called “Transaction Tags” (or “Tags” for short). What are Tags? Well, the short answer is they provide an alternative way to group transactions beyond the standard categories Moneydance provides.
Why would you use this? Well, let’s examine a few scenarios. Let’s say I have a category called Parties. Let’s go a bit further and say that I threw a backyard BBQ called “Project Velociraptor” in 2011 (which I did) and I placed all the expenses incurred for that party into the Parties category. Now when I run a category report I see these expenses summed up in the Parties category just as I expect.
Suppose a couple years later I want to throw another party of a similar nature. I want to see how much it cost me last time, so that I can budget properly. I could run a category report for Parties for the year 2011 and get my total. Easy enough.
But, what if I end up also throwing a Halloween party in 2011? Now I have to try to figure out which transactions belong to the BBQ, and which transactions belong to the Halloween party. That’s kind of a pain.
I can solve this problem with Tags. First, I’d create a transaction tag by clicking Tools -> Edit Transaction Tags from the main menu.
I’m now presented with a list of Tags. I would then click on the “+” sign to create a new Tag. I’ll call it 2011 Project Velociraptor, then accept the changes. I then repeat the process, calling the new Tag 2011 Halloween Party. (I like to prefix my tags with the year so they’ll sort correctly in the Edit List window and the drop down list.)
Now when I enter any transactions associated with the BBQ I’ll assign them to the Parties category, but I’ll also add the 2011 Project Velociraptor Tag to it. This can be done by clicking on the Tags field, then scrolling to the appropriate tag and left clicking it. That will place a check mark beside it. Hit the Enter key, and it’ll accept your selection.
For any expenses associated with the Halloween party, I’ll repeat the process, but this time I’ll add the 2011 Halloween Party Tag instead. (Keep in mind that all these transactions were still assigned to the Parties category.)
Now I want to run a Tag report to see how much I spent on each party. Click Tools -> Graphs and Reports to bring up the dialog box below.
In this example we’ll run for all dates and for all types of accounts. This will show us everything.
So if I want to see the totals I spent on parties in 2011 I’ll run a category report for Parties.
In order to see how much I spent on the BBQ and the Halloween parties individually I can just run the tag report and both of them will show up with distinct totals.
What’s also nice is that a transaction can roll up to multiple tags. Be careful though; due to this fact Tags really aren’t additive with other Tags. The Tag report won’t sum them at the bottom which will help keep you from making that mistake.
Another example of Tag usage is vacations. You might have a Travel category, into which you placed the expenses from two vacations taken back to back. Tagging each vacation allows you to track the expenses for each individual trip.
I also used this to track expenses for my Nintendo wii. I bought it several years ago and placed the expenses in the Gaming Consoles:Hardware subcategory. I also bought games for it, which I placed into the Games Consoles: Video Games subcategory. Over subsequent years I bought more games, then more hardware.
Rather than have to build a report manually and try to include every transaction over multiple years, I tagged them all with a wii Tag. Now I can refer to the tag report to see how much my wii itself has really cost me, and my category report shows me overall how much I spent gaming console-related stuff (which is not necessarily all wii-related).
I use this general rule of thumb when deciding whether or not to use a Tag vs. a Category. If it’s a one-time expense then I’ll probably use a Tag. If it’s going to be a recurring expense then I’ll usually use a category. Other uses can and do apply, of course, but this is generally how I use them. One of the most useful aspects of Tags is the flexibility they provide.
Moneydance’s Transaction Tags can be a very elegant and useful way to group expenses above and beyond the usual category groupings. Hopefully this example aptly demonstrates this.
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