[Sticky] Expenses Definition
Expenses in BodesWell are all the various ways that cash leaves your account, including monthly spending but also transfers to investment accounts and debt payments.
Here are some examples of expenses in BodesWell:
- Withdrawing $200 from an ATM to take your family to dinner
- Using a debit card to pay for a $200 dinner
- Writing a check for $200 for dinner
- Paying a credit card bill of $200 that you accumulated from buying dinner. In BodesWell, using the credit card creates a debt. Paying the debt creates the expense.
- Buying $200 worth of equity in a restaurant stock. In BodesWell, the $200 expense will be matched by a $200 asset in your investments.
- Putting $200 down for a mortgage to buy a restaurant. In BodesWell, the $200 expense will be accompanied by equity in the restaurant and a debt for the balance of the mortgage.
We use your historical expense levels or transactions to project your future expenses. There are two ways to tell BodesWell about your historical expenses:
- You can enter expense levels manually in the initial setup process, and
- You can connect bank accounts, credit cards and other financial accounts to BodesWell. We will examine the transactions directly and attempt to categorize your expenses.
Categorizing expenses is surprisingly hard to do with 100% accuracy. Therefore, we've built in the ability to edit the transaction categories of all your expenses, as well as set up rules to re-categorize matching expenses in the future.
We do not apply inflation effects to expenses in the future. If you'd like to learn more about how BodesWell deals with the effects of inflation, you can learn more here: https://bodeswell.io/community/learn_more/inflation-in-bodeswell/ .