Budget Categories are designed to allow for tracking various transactions in order to better understand your finances and their source or destination. One example would be if you wanted to track your expenses for office supplies. You could create a Budget Category for Office Supplies and attach it to each expense created for supplies in that category.
For contributions, you could create different categories for the different sources of donations. For example: “Online”, “Events”, & “Calltime”.
When creating Budget Categories, you also have the option of associating it with a Parent Category. Parent Categories are more widespread in definition that could cover multiple Budget Categories. For example, using the Office Supplies example above, you could assign that Budget Category to a Parent Category called Administrative. This Administrative Parent Category could also have other Budget Categories tied to it, such as Meals or Bank Fees.