You should use tags when you want to analyse your spending across multiple categories. They are very helpful when you have a big event or holiday coming up. They are also helpful when you spend across different people, events or possessions.
Here are some examples of when clients commonly use tags -
You have investment properties
Your expenses are categorised as bills & utilities, council rates etc. You can then add tags labelled by each property name or suburb. This can help you separate the expenses from different investment properties or your owner occupied property from your investment property.
You want to track what you spend on each child
You have child care, school expenses, clothes and gifts. By putting a tag for each child's name on each transaction you can understand at the end of the year what you spent on each and where it was spent.
You and your partner want to know who spends what
Just by putting your name on the transactions that relate to your clothes, shoes, coffees, meals out and alcohol you will understand how much you and your partner are spending individually in each of the categories you are interested in.
You are making payments towards an event
If you have a wedding, christening, birthday party or Christmas in your sights and you are spending relevant to the event, you may wish to track how much you are spending so you know or so you can budget for similar events in future. By tagging the transaction you can easily check how you are tracking to budget, or start saving early for the next event.
You want to categorise transactions for tax time
Some payments you make are deductible, by tagging these with the word "tax" at tax time, all you need to do is go to your spending reports and check how much you are able to claim. As they are stored in their categories you are able to break this down to be able to fill in your tax return.