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AI for Categorization

ssherman68

I'm surprised at how bad Quicken can still be at guessing the category of a transaction. For example, I use a "Schools First" ATM. Quicken always categorizes it as "Education".

Has any thought been given to using AI to look at all the non-personal data of a transaction and make a better guess of what it is?

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Comments

Chris_QPW

I believe AI is supposedly being used to make those guesses, and any information a given transaction has in it, like some retail transactions are supposed to have more information on them. No matter what, a guess is a guess (And just looking at "School First" I would certainly think a lot of humans would think that would be Education). A user rule will win out almost every time. The only real situation I can think of where a guess is better is when you are talking about a new user starting out, and maybe a guess is better than nothing.

I think unless a person is traveling all over and therefore getting tons of new payees, then I think the best policy is to build up user rules for the categories for the first month and then from then on, not automatically categorize new transactions. Leave them blank so that they are easy to spot and add new user rules for them.

jacobs

This is what QuickFill Rules are built to help with. In this case, what should a cash withdrawal from the ATM be categorized as? In my case, ATM withdrawals are transfers to my Cash account, and that's something Quicken could never know based on the download. But if you create a QuickFill rule that says…

Payee: Schools First
Category: Transfer:[Personal Cash]

…then all future downloads from Schools First will be properly categorized as a transfer to your Personal Cash account.

Chris_QPW

Yeah, yours would be a good guess, but personally I would use a QuickFill Rule to leave the category blank. The same as I would for "Withdraw".

We almost never withdraw cash, and when we do, we have a purpose for it in mind, but that it can be any number of things. So, I categorized the withdrawal when it is downloaded. And a blank category is much easier to find than some guess.

The truth is that "ATM" tells you nothing about how that money is going to be used. Your system is to move it to another account where it will be categorized as it is used. Which is a good policy if you withdraw money regularly and then use it for various things. But it also means that you are now going to be manually entering those transactions when that cash is used.

The bottom line is that AI isn't magic, and ATM, Check, Withdraw, … have zero information in them, so if you are forcing someone or AI or any such system to put a category on it, it is a pure guess and there isn't any way for it to "know".

And in fact, "non-AI" can be better than "AI that has no feedback".

An example of that is in Quicken Windows: they have recently introduced a new feature, "Retail Purchase Categorization". It is for Amazon for now, but they say they will expand it to other retailers later. The problem it is trying to fix (and not doing a great job at it) is that the transactions download with just one payee, and also Amazon might have split the order in different ways. It does the categorization by using a web browser extension that sends the invoice information to the Quicken Cloud, which they have said definitely uses AI to assign a category (and create splits when it has multiple items in the order). The problem is that since it is done on the server, there isn't any feedback from the Desktop program/user. My wife buys things like ribbons for decorating trees, and it assigns "Gifts", and I want it to be "Entertainment". And there is no way for me to tell it to use "Entertainment".

Given that you can categorize this every time to the same thing, like your transfer or maybe my blank category, then what should be done isn't "AI" but an automated way to create a QuickFill Rule. Right now, Quicken Windows allows for memorized payees (Which is Quicken Window's equivalent of Quicken Mac's QuickFill rules).

With this on, Quicken Windows will create a new memorized payee with the category you saved. Note that this is also used in combination with automatically creating renaming rules too, which is another preference.

Personally, I don't like it on because I might want to have a one-off transaction that I don't want to create a memorized payee for. So, what I do is just fill in the category, and if I want it memorized, I just select Ctrl+M, which creates a memorized payee.

[Edited - Readability]

ssherman68

No doubt I can do better with my QuickFill transactions, but that's not the point. Quicken has a built-in category named "Cash & ATM" so Quicken would actually know what to do with an ATM transaction. After 40 years of using Quicken, I have gotten away from over-categorizing everything and leave things in the category Quicken picks if it's reasonable and repeatable.

I'm not in front of Quicken right now, but when Quicken downloads transactions from the bank, there are clues (transaction & merchant IDs, names, etc.) that would point to what kind of transaction this is. Those, along with the company name on the transaction, can be used and searched to form a better guess as to what kind of transaction this is.

When Quicken mis-categorizes something, and I can't remember what it is, I do a Google search on it and 9 times out of 10 I can find out what it is. I'm sure sticking it into ChatGPT would even give me better results. If I can do that, then Quicken can use an LLM to make better guesses at what the categories should be.

[Edited - Readability]

Chris_QPW

I got curious and asked CoPilot this:

What category would you give for a transaction in Quicken that has a payee of: "Schools First" ATM?

Answer:

In Quicken, a payee like "Schools First ATM" is usually not enough by itself to determine the true spending category. It typically indicates an ATM transaction involving SchoolsFirst Federal Credit Union, not what the money was ultimately spent on.

Common categorizations are:

Cash Withdrawal (most common) if you withdrew cash from an ATM.
- Category: Cash, ATM Withdrawal, or Transfer:[Checking Account] depending on how you've set up Quicken.
Bank Fee if it was an ATM surcharge or service fee.
- Category: Bank Charges or Service Fees.
Transfer if the transaction represents moving money between accounts.
- Category: Transfer.

To categorize it correctly, look at:

The transaction amount.
Whether there's a corresponding cash deposit/withdrawal.
The transaction type in your bank details (Withdrawal, Fee, Transfer, etc.).

If you can provide the full transaction description and whether the amount is positive or negative, I can suggest the most accurate Quicken category.

___________________________

I think that is a pretty good explanation. Like you said if the transaction was a retail purchase, then maybe there might have been some information that we don't get to see, but for a withdraw no one but you know how you are going to use that money and therefore how to categorize it, and for that matter your viewpoint on how you like things to be categorize, detailed, or more general and such.

The main problem I see with the current use of AI in Quicken's flow is that it is on their server with no feedback loop from the user.