Think about the last coffee you paid for with your phone: you tapped, heard the beep and walked on. Now think about your last holiday — dozens of expenses spread across days, cities and categories. Your brain stores these two moments in very different ways, and that difference is what this article is about.
Before we talk about any tool, it's worth understanding what behavioural economics already knows about the way we organise — and lose track of — money. Because the practical solution, in the end, fits exactly into that knowledge.
Your brain already sorts money into drawers
In 1999, the economist Richard H. Thaler — who would go on to win the Nobel Prize in Economics in 2017 — gave a name to something we all do without thinking. He called it mental accounting: "the set of cognitive operations used by individuals and households to organize, evaluate, and keep track of financial activities" [1]. In other words, your head has been sorting money into drawers — the "car" one, the "holidays" one, the "kids" one — long before you open any spreadsheet.
Thaler describes, as part of that mechanism, the way we group spending: "Expenditures are grouped into categories (housing, food, etc.) and spending is sometimes constrained by implicit or explicit budgets" [1]. The trouble is that those mental drawers are fragile: we forget them, we mix them up, and by the end of the month it's hard to say where the money went. That is the blind spot deliberate organisation — categories and, above all, tags — is there to cover.
The pain of paying has become invisible
There's a second reason we lose track of money: we've stopped feeling it. In the 1990s, the researcher Ofer Zellermayer coined the expression pain of paying to describe "an immediate negative emotion when giving money or imagining to give money" [2]. The psychologist and behavioural economist Dan Ariely puts it even more bluntly: "Simply put, it hurts us to spend (and part with) our money." [3]
That pain serves a useful purpose — it slows us down. The problem is that modern payment methods numb it. In a classic study of real transactions, Drazen Prelec and Duncan Simester of MIT Sloan showed that "willingness-to-pay can be increased when customers are instructed to use a credit card rather than cash" and that "the effect may be large (up to 100%)" [4]. If a credit card already came close to doubling the urge to spend, imagine paying by phone or by watch: fast, contactless, painless. Every beep is a spend you barely got to register.
We plan — but we barely keep records
The data confirms this blind spot. According to the OECD's international financial literacy survey (OECD/INFE 2023), the average adult scores 60 out of 100 and only 34% reach the recommended minimum of 70 points [5]. One of the three behaviour blocks assessed is precisely "keeping track of money flows", which the OECD defines as evaluating "if individuals keep a close watch on their personal finances, if they pay their bills on time and if they avoid falling into arrears" [5].
In Portugal, the picture has a revealing nuance. The 4th Survey on the Financial Literacy of the Portuguese Population, by the National Council of Financial Supervisors (Banco de Portugal, CMVM and ASF), notes that "most respondents (82.1%) report having at least one way of planning and monitoring the household budget" (our translation) [6]. But look at the detail: only 32.8% take note of their expenses — and just 4.9% use their bank's app or a personal finance tool to track them, a sharp drop from 13.6% in 2020 [6]. We say we're in control; we record very little.
Categories answer "what?". Tags answer "why?"
This is where the distinction between categories and tags stops being a technical detail and becomes the heart of the matter. A category answers "what type of spending is this?" — Food, Transport, Health. It's the sorting Thaler describes: useful, but blind to context. A tag answers the questions the category can't reach: why, for whom, on what occasion. The same €40 dinner is always "Food" — but it can be "grandma's birthday", "work meeting" or "lazy Friday". The category is the what; the tag is the story.
And making that story visible changes behaviour. Yaron Levi and Shlomo Benartzi analysed real transactions from an account aggregation company to "study the impact of access to personal financial information from mobile devices on consumer behavior" [7]: when people started seeing their finances more often and more clearly, they cut back on discretionary spending. In a related field experiment, published in the Journal of Financial and Quantitative Analysis, users who saw their spending framed and compared with the past reduced discretionary spending by around 15% [8]. Recording and labelling isn't bureaucracy — it's what makes spending visible enough for you to question it.
With the bridge built, it's time to get hands-on. Here are five concrete ways to use tags to recover the context that categories throw away.
1. Trip or event: the real cost of a week
A week in the Algarve generates dozens of transactions spread across several categories: fuel in Transport, meals in Food, tickets in Leisure, the stay in Accommodation. With categories alone, it's impossible to answer the obvious question — how much did that week cost? Apply the tag Algarve Holiday 2026 to everything that belongs to it and you get the total in a single filter, broken down by category. Besides closing the books on the past, you're left with real data to budget your next holiday instead of guessing.
2. Household member: who drives each expense
In a family, expenses are shared but patterns are individual. Knowing you spent €800 on Food doesn't tell you whether it was the monthly supermarket shop, one person's work lunches, or the other's weekends away. Tags like João, Maria or Kids assign each transaction to whoever generated it. The result is a financial conversation based on data, not perceptions — useful for couples who want to balance contributions, or for parents who want to understand the real cost of each stage.
3. Project: renovations, car, wedding
Some spending isn't day-to-day expense: it's projects with a beginning and an end. Home renovations, buying a car, a wedding. They spread across months and completely different categories, and it's easy to lose track of them. Tags like House Renovation or Wedding gather everything that belongs to the project, regardless of category, and show the accumulated cost against what you'd planned. With renovations — where costs are usually underestimated — that sum can be the difference between a surprise and an informed decision about when to stop.
4. Subscriptions: the spending you don't feel
Subscriptions are the perfect example of the pain of paying under anaesthetic: small, automatic, invisible. Streaming, music, cloud storage, that app you tried a year ago and never cancelled. A cross-cutting Subscriptions tag brings them all together into a single number — and that number tends to surprise. Seeing the annual total side by side is, more often than not, the nudge you needed to cancel what you no longer use.
5. Reimbursables and deductibles: nothing gets forgotten
If you have expenses paid out of your own pocket but reimbursable by your employer, or spending that matters for tax, the problem isn't spending — it's not forgetting. Tags like Reimbursable or Tax Deductible create a living list you can cross-check against reimbursements received, or export when tax season arrives, without trawling through statements looking for receipts. It's your money — and without a label, it tends to disappear.
How AtivaMoney applies this — with AI that learns from you
Tagging every transaction by hand would be too much work to last — and a system that doesn't last is no use. In AtivaMoney, every transaction can have one category and several tags, and an AI model learns your patterns to suggest them automatically.
At first, you define and apply the tags. As the system accumulates examples — this supermarket usually gets "Maria", Friday's fuel is "Work" — it starts pre-filling suggestions. You confirm or correct with a click, and the model learns from every correction. We don't promise to get it right first time, every time; we promise to improve with your use, so that tagging stops being a chore and simply becomes the way your data organises itself. All of it on European infrastructure — without selling your data or using it for advertising.
Checklist: put tags to work this week
- Pick one question your categories can't answer today (e.g. "how much did the summer cost?").
- Create a clear, reusable tag for it —
Holidays 2026beatstrip. - Apply it to your recent related expenses and let the AI learn the pattern from there.
- At the end of the month, filter by that tag and read the total out loud. That's the number that changes behaviour.
- Keep a
Reviewtag for anything that makes you hesitate — and revisit it in your monthly review.
Behavioural economics is clear: we organise money in our heads, but we feel it less and less and record it even less. Categories sort the what. Tags give you back the why — and it's the why that makes you change your mind before the next beep.
References
- Richard H. Thaler — Mental Accounting Matters, Journal of Behavioral Decision Making, 12: 183–206, 1999.
- Ofer Zellermayer's definition of pain of paying (doctoral dissertation, Carnegie Mellon University, 1996), quoted verbatim in a peer-reviewed article (PubMed Central, PMC11444724).
- Dan Ariely — Easing the Pain This Holiday Season, danariely.com, 1 December 2011.
- Drazen Prelec and Duncan Simester — Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay, Marketing Letters, 12: 5–12, 2001.
- OECD/INFE — 2023 International Survey of Adult Financial Literacy, 2023 (pp. 6, 15, 22).
- National Council of Financial Supervisors (Banco de Portugal, CMVM, ASF) — Report of the 4th Survey on the Financial Literacy of the Portuguese Population, 2023.
- Yaron Levi and Shlomo Benartzi — Mind the App: Mobile Access to Financial Information and Consumer Behavior, SSRN, 2020.
- Yaron Levi — Personal Financial Information Presentation and Consumer Spending, Journal of Financial and Quantitative Analysis (accepted; PDF 2025), p. 5.