Cake Budget
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How Rules Automation Works

Deep dive into Cake Budget's intelligent rules engine for transaction automation

Last updated: October 10, 2025

Rules automation is Cake Budget’s intelligence layer—teaching the app to handle your transactions exactly how you would, but automatically. This guide explains how rules evaluate transactions and execute actions.

The Core Concept

Rules are condition-based automation:

IF [conditions match]
THEN [execute actions]

Every transaction is evaluated against your active rules. When conditions match, actions execute automatically.

The Rule Evaluation Flow

Step 1: Transaction Arrives

A transaction enters the system from:

  • Plaid sync: New transaction from your bank
  • Manual entry: You manually add a transaction
  • System creation: Internal transfers, funding events, etc.

Step 2: Rule Matching

The system checks all your active rules against the transaction:

Question: “Do this transaction’s properties match any rule conditions?”

What’s Checked:

  • Merchant name
  • Transaction amount
  • Description text
  • Category (if already assigned)
  • Slice (if already assigned)
  • Account
  • Date
  • Balance amounts

Match Types:

AND Logic (All conditions must match):

Rule: Expensive Grocery Trip
Conditions (AND):
- Merchant contains "Whole Foods"
- Amount greater than $100
- Account equals "Chase Checking"

Transaction: Whole Foods, $125, Chase Checking
✅ ALL conditions match → Rule executes

Transaction: Whole Foods, $45, Chase Checking
❌ Amount condition fails → Rule skips

OR Logic (Any condition can match):

Rule: All Grocery Stores
Conditions (OR):
- Merchant contains "Safeway"
- Merchant contains "Trader Joe's"
- Merchant contains "Whole Foods"

Transaction: Safeway, $50
✅ First condition matches → Rule executes
(Doesn't need to check other conditions)

Step 3: Action Execution

When a rule matches, all configured actions execute in order:

Available Actions:

  1. Assign to Slice: Move transaction to a specific budget slice
  2. Assign Category: Set the transaction’s category
  3. Round Up: Round transaction amount, send difference to a slice
  4. Update Description: Change the transaction’s name/description
  5. Add Notes: Append notes to the transaction
  6. Split Transaction: Automatically split into two parts (not available for backfilling)
  7. Transfer Funds: Move money between slices

Action Order Matters:

Rule: Process Amazon Purchase
Actions (in order):
1. Assign to Slice: "Shopping"
2. Assign Category: "Online Shopping"
3. Add Notes: "Review at end of month"

Result: All three actions execute sequentially

Step 4: Notification & Logging

After execution:

  • Success: Rule execution is logged for audit
  • Failure: Error is recorded and user may be notified
  • History: Transaction shows which rules were applied
  • Email (optional): Notification sent about rule execution

Multiple Rules Matching the Same Transaction

What happens when multiple rules match one transaction?

All Matching Rules Execute

Unlike “first match wins” systems, all matching rules run.

Example:

Transaction: Starbucks $4.50

Rule 1 matches: Merchant contains "Starbucks"
Actions: Assign to "Dining Out", Category "Coffee Shops"

Rule 2 matches: Amount less than $10
Actions: Add Notes "Small purchase"

Result:
✅ Rule 1 executes: Assigned to Dining Out, categorized as Coffee Shops
✅ Rule 2 executes: Note added "Small purchase"

Final: Transaction has slice, category, AND note

Later Actions Can Override Earlier Ones

If multiple rules assign to different slices, the last one wins:

Example:

Transaction: Starbucks $4.50

Rule 1 (created first): Merchant contains "Starbucks" → Assign to "Dining Out"
Rule 2 (created later): Amount less than $5 → Assign to "Small Purchases"

Result:
- Rule 1 executes: Assigned to "Dining Out"
- Rule 2 executes: Assigned to "Small Purchases" (overrides Rule 1)

Final: Transaction in "Small Purchases" slice

How to Avoid Conflicts:

  • Make rules more specific (add additional conditions)
  • Use AND logic to narrow matching
  • Review rule order and priorities
  • Test rules before backfilling

Rule Categories

Cake Budget has three types of rules:

Transaction Rules (Most Common)

Trigger: When transactions are created or synced from your bank

Use Cases:

  • Auto-categorize merchant purchases
  • Round up everyday spending
  • Flag large purchases
  • Split specific merchant transactions

Example:

IF Merchant contains "Target"
THEN Assign to "Shopping" slice

Balance Rules

Trigger: When slice or safe-to-spend balances reach thresholds

Use Cases:

  • Alert when emergency fund falls below minimum
  • Notify when safe-to-spend is low
  • Auto-transfer funds between slices when thresholds are met

Example:

IF Emergency Fund balance less than $1,000
THEN Transfer $100 from safe-to-spend to Emergency Fund

Date-based Rules

Trigger: Transactions within a specific date range

Use Cases:

  • Vacation spending tracking (e.g., July 1-15 Europe trip)
  • Holiday shopping budgets (e.g., December 1-25 Christmas spending)
  • Seasonal expense categorization (e.g., Summer camp expenses)
  • Project-based spending (e.g., Home renovation May-August)

Example:

IF transaction date is between July 1, 2025 - July 15, 2025
THEN Assign to "Europe Vacation" slice
AND Assign category "Travel"
AND Add note "Vacation expense"

Note: Date-based rules currently work for specific date ranges only, not recurring schedules (e.g., “every 1st of the month”). Recurring date rules are a planned feature.

Rule Backfilling

Backfilling applies rules retroactively to existing transactions.

How It Works

  1. You create or modify a rule
  2. Click “Backfill” in the rule details
  3. Choose date range (last 30 days, 90 days, 1 year, custom)
  4. System scans all transactions in that period
  5. Applies the rule to matching transactions
  6. Shows summary of changes

Example:

Rule: Merchant contains "Starbucks" → Assign Category "Coffee Shops" + Add Note "Review spending"
Backfill: 90 days (from Jan 1 - Mar 31)

Result:
✅ 47 Starbucks transactions found
✅ Category set to "Coffee Shops" on all
✅ Note "Review spending" added to all
✅ Summary notification sent

Backfill Limitations

⚠️ Only These 3 Actions Work with Backfilling:

  • ✅ Assign Category - Safe, doesn’t move money
  • ✅ Update Description - Safe, doesn’t move money
  • ✅ Add Notes - Safe, doesn’t move money

NOT Available for Backfilling:

  • ❌ Assign to Slice - Would move funds retroactively
  • ❌ Round Up - Would move funds retroactively
  • ❌ Split Transaction - Too complex for bulk application
  • ❌ Transfer Funds - Would move funds retroactively

Why? Backfilling only applies actions that don’t affect your slice balances. This prevents accidentally breaking your budget history.

Additional Restrictions:

  • Only scans unassigned transactions (transactions without a slice)
  • Requires custom date range (from date to to date)

Best Practices:

  • Test rules on new transactions first (1-2 weeks)
  • Verify the rule works correctly
  • Then backfill once you’re confident
  • Use backfilling mainly for categorization cleanup

Advanced Rule Features

Condition Operators

Different fields support different matching operators:

Text Fields (Merchant, Description):

  • Contains: Text includes the value (case-insensitive)
  • Equals: Exact match (case-insensitive)
  • Does not contain: Text doesn’t include the value

Number Fields (Amount, Balances):

  • Equals: Exact amount
  • Greater than: Amount exceeds value
  • Less than: Amount below value
  • Between: Amount within range

Dropdown Fields (Category, Slice, Account):

  • Equals: Matches the selected option
  • Does not equal: Doesn’t match the selected option

Date Fields:

  • Between: Date within specified range

Complex Condition Logic

AND Logic Example:

Rule: Large Home Depot Purchases
Conditions (ALL must match):
- Merchant contains "Home Depot"
- Amount greater than $200
- Category equals "Home Improvement"

Result: Only catches major home improvement purchases, not small items

OR Logic Example:

Rule: All Gas Stations
Conditions (ANY can match):
- Merchant contains "Shell"
- Merchant contains "Chevron"
- Merchant contains "76"
- Merchant contains "Exxon"
- Merchant contains "BP"

Result: Catches purchases from any of these gas stations

Multiple Actions per Rule

Rules can execute multiple actions simultaneously:

Example:

Rule: Process Paycheck
Conditions:
- Description contains "Payroll"

Actions (all execute):
1. Assign Category: "Income"
2. Add Notes: "Regular paycheck"
3. Round Up to Emergency Fund
4. Transfer $100 to "Savings"

Result: One transaction triggers four separate actions

Real-World Rule Scenarios

Scenario 1: Merchant-Based Auto-Categorization

Goal: Automatically categorize all grocery shopping.

Rule Setup:

Name: Grocery Auto-Categorization
Category: Transaction Rule
Condition Logic: OR

Conditions:
- Merchant contains "Safeway"
- Merchant contains "Whole Foods"
- Merchant contains "Trader Joe's"
- Merchant contains "Kroger"

Actions:
- Assign to Slice: "Groceries"
- Assign Category: "Groceries"

How It Works:

  1. Transaction arrives: “SAFEWAY #1234”
  2. First condition matches: Contains “Safeway”
  3. OR logic: At least one condition met → Rule triggers
  4. Action 1: Transaction assigned to Groceries slice
  5. Action 2: Category set to Groceries
  6. Done in milliseconds, fully automatic

Scenario 2: Emergency Fund Round-Up

Goal: Round up all purchases to the nearest dollar, send change to savings.

Rule Setup:

Name: Round Up to Emergency Fund
Category: Transaction Rule
Condition Logic: AND

Conditions:
- Amount greater than $0 (only positive amounts)
- Merchant does not contain "Internal Transfer"

Actions:
- Round Up to nearest dollar
- Target Slice: Emergency Fund

How It Works:

Transaction 1: Coffee $4.50
- Round up: $5.00
- Difference: $0.50 → Emergency Fund

Transaction 2: Groceries $87.23
- Round up: $88.00
- Difference: $0.77 → Emergency Fund

Monthly impact: 50 transactions × $0.50 avg = $25/month saved automatically

Scenario 3: Business Expense Auto-Split

Goal: Automatically split Amazon purchases 60% business, 40% personal.

Rule Setup:

Name: Amazon Business Split
Category: Transaction Rule

Conditions:
- Merchant contains "AMZN"
OR Merchant contains "Amazon"

Actions:
- Split Transaction:
  - Split 1: 60% → Business Expenses (Category: Business)
  - Split 2: 40% → Personal Shopping (Category: Shopping)

How It Works:

  1. Transaction: Amazon $150
  2. Merchant matches: Contains “Amazon”
  3. Split action executes:
    • Creates Part 1: $90 → Business Expenses
    • Creates Part 2: $60 → Personal Shopping
  4. Original transaction becomes parent placeholder

Limitation: Split actions don’t work for backfilling (only new transactions).

Rule Execution Timing

Real-Time Processing

Rules execute immediately when transactions are created:

Timeline:

12:00:00 PM - Transaction syncs from bank
12:00:01 PM - Active rules evaluate
12:00:02 PM - Matching rules execute actions
12:00:03 PM - Transaction categorized and ready

Result: By the time you see the transaction in your list, rules have already processed it.

Batch Processing (Backfill)

When you backfill:

Timeline:

User clicks "Backfill" → Selects date range → Confirms

Background:
- System queues all matching transactions
- Processes in batches (prevents timeouts)
- Applies rule to each matching transaction
- Records results
- Sends summary email when complete

Duration: Depends on transaction count. 100 transactions = ~10 seconds.

Notifications & History

Rule Execution Tracking

For Each Transaction:

  • Rules applied are recorded
  • Success/failure status tracked
  • Actions taken are logged

View Rule History:

  1. Open any transaction details
  2. Look for “Rules Applied” section
  3. See which rules matched
  4. See which actions were taken
  5. Verify everything worked correctly

Email Notifications (Optional)

You can receive emails when rules execute:

What’s Included:

  • Which rule matched
  • What transaction triggered it
  • What actions were taken
  • Success or error status

Managing Notifications: Navigate to Settings → Notifications to control rule emails.

Batch Notifications: If multiple rules match one transaction, Cake Budget sends one consolidated email showing all rule results—not separate emails for each rule.

Pro Tips

💡 Test in Small Batches: Create a rule, let it run for a week, verify it works, then backfill.

💡 Use Descriptive Names: “Starbucks → Dining Out” beats “Coffee Rule” six months from now.

💡 Leverage OR Logic: One rule with 5 merchant conditions beats 5 separate rules.

💡 Check Rule History: Review which rules are executing most often. Delete unused rules.

💡 Combine Actions: Don’t just assign to slice—also set category and add notes for complete automation.

💡 Start Simple: 3-5 rules for your most frequent merchants. Don’t try to automate everything on day one.

💡 Review Monthly: Spending patterns change. Add new rules for new merchants, delete obsolete rules.

Common Misconceptions

”Rules only work on new transactions”

Not true. Backfilling applies rules to historical transactions. However, some actions (like splits) are limited to new transactions only.

”The first matching rule wins”

Not true. All matching rules execute. If rules conflict (both assign to different slices), the last one wins.

”Rules are permanent”

Not true. You can edit, deactivate, or delete rules anytime. Past actions remain, but future transactions won’t be affected.

”I need a rule for every merchant”

Not true. Use OR logic to create one rule for multiple merchants in the same category. Five gas stations = one rule with OR conditions.

The Bottom Line: Rules automation transforms budgeting from a manual chore into an intelligent, self-managing system. Set up rules once, and let Cake Budget handle the repetitive categorization work forever.

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