Categories, Budgets, and Transaction Rules

Last updated: August 13, 2026

All calculations, goals, and metrics in Threshold are for educational purposes only and should not be taken as investment or financial advice.

Plaid assigns each transaction a starting category. You can change it, create categories, set monthly targets, correct transaction amounts, and create rules for future matches.

How categories start

When a transaction syncs in, Plaid assigns it a starting category based on the merchant and transaction type, such as Food & Drink or Transportation. You can change the category when it is wrong. Your choice overrides Plaid's default.

To see how transactions arrive in the first place, see How Transaction Syncing Works.

Re-categorizing a single transaction

Each transaction carries a category pill you can tap to change it:

  1. Open the canvas and make sure you're in a real (non-sample) view of your accounts.
  2. Tap the transaction to open its detail sheet. You'll see the amount, date, merchant, and a category pill.
  3. Tap the category pill to open the category picker.
  4. Pick the category you want. Your custom categories are listed first, then Plaid's defaults. The current category shows a checkmark.

Your choice saves immediately. It updates the Categories section, spend totals, and calculations that use category spending. To restore the original category, reopen the picker and tap Revert to default. This option appears after you set an override.

Building your own categories

You can create categories such as Side Project or Kids and assign transactions to them. Open Manage categories(from the Categories section's overflow menu, or the Create new category row at the top of the category picker) to reach the manager.

  • Create: Type a name in the New category field and tap Create category. Threshold automatically gives each new category its own color so it gets a distinct slice in the spending donut. The form clears after each save, so you can add several in a row.
  • Rename: Under My categories, tap a category to expand its edit form, change the name, and tap Save.
  • Hide: In the same edit form, tap Hide category. Hiding is reversible: its transactions fall back to their Plaid default while hidden, and restoring it brings its transactions and rules straight back. Hidden categories collect in a Hidden categories section with a Restore action.
  • Delete: In the same edit form, choose delete. Threshold shows how many transactions will return to their Plaid default and whether it will remove any monthly targets.

Plaid's default categories appear in a read-only Default categorieslist in the manager. You can't rename or delete them. You can hide any built-in category except theOther catch-all, where hidden category transactions go.

Turning a category into a budget

The Categoriessection on your canvas shows how much you've spent in each category for the month, as a donut with a row per category. A category becomes a budget the moment you give it a monthly target:

  1. Open the Categories section.
  2. Use the month pills at the top to land on the month you want.
  3. Tap a category row to expand it.
  4. Tap Set target (or Edit if one already exists), enter a monthly amount, and tap Save target.

Once a category has a target, its row shows a progress bar and a spent-of-target figure (for example, $240 / $400), and the donut hero totals your spending against everything you've budgeted. Targets are set per month, so a change to one month doesn't rewrite the others. You cannot set a target for the Other bucket.

Correcting a transaction's amount

You can correct the amount used for a reimbursed charge or split bill:

  1. Tap the transaction to open its detail sheet.
  2. Tap the amount at the top to open the amount editor.
  3. Enter the new amount and tap Save amount.

The override changes only the amount. The direction stays locked. A $200 outflow can become a $50 outflow, but never a $50 inflow. An edited transaction is marked Edited, and the new value flows through to your category spend, budget progress, goal contributions, and any calculations that use it. To undo, reopen the editor and tap Revert to original, which appears only while an override is in place. (Amount editing isn't available for investment transactions.)

Creating a rule from a transaction

After you recategorize a transaction, Threshold can create a rule for matching transactions. The New rule for [category]prompt offers two match types:

  • Exact match: Matches the full merchant string, shown as-is.
  • Partial match:Pre-fills the merchant string into an editable field you can trim to the meaningful core, so “Fisher Brewing Comp Salt Lake City” becomes “Fisher Brewing.” A shorter substring catches more transactions.

As you adjust the pattern, Threshold shows a live count of how many transactions match and previews them. Tap Create ruleto apply it to matching past and future transactions. To skip it, tap No thanksand Threshold won't ask again for that transaction in this session.

A category set on an individual transaction overrides a rule. Creating a rule does not replace an existing manual choice.