diff --git a/7project/backend/app/api/auth.py b/7project/backend/app/api/auth.py
new file mode 100644
index 0000000..576e80e
--- /dev/null
+++ b/7project/backend/app/api/auth.py
@@ -0,0 +1,31 @@
+from fastapi import APIRouter
+
+from app.schemas.user import UserCreate, UserRead, UserUpdate
+from app.services.user_service import auth_backend, fastapi_users
+
+router = APIRouter()
+
+# Keep existing paths as-is under /auth/* and /users/*
+router.include_router(
+    fastapi_users.get_auth_router(auth_backend), prefix="/auth/jwt", tags=["auth"]
+)
+router.include_router(
+    fastapi_users.get_register_router(UserRead, UserCreate),
+    prefix="/auth",
+    tags=["auth"],
+)
+router.include_router(
+    fastapi_users.get_reset_password_router(),
+    prefix="/auth",
+    tags=["auth"],
+)
+router.include_router(
+    fastapi_users.get_verify_router(UserRead),
+    prefix="/auth",
+    tags=["auth"],
+)
+router.include_router(
+    fastapi_users.get_users_router(UserRead, UserUpdate),
+    prefix="/users",
+    tags=["users"],
+)
diff --git a/7project/backend/app/api/categories.py b/7project/backend/app/api/categories.py
new file mode 100644
index 0000000..44490f3
--- /dev/null
+++ b/7project/backend/app/api/categories.py
@@ -0,0 +1,77 @@
+from typing import List
+
+from fastapi import APIRouter, Depends, HTTPException, status
+from sqlalchemy import select, delete
+from sqlalchemy.ext.asyncio import AsyncSession
+
+from app.models.categories import Category
+from app.schemas.category import CategoryCreate, CategoryRead
+from app.services.db import get_async_session
+from app.services.user_service import current_active_user
+from app.models.user import User
+
+router = APIRouter(prefix="/categories", tags=["categories"])
+
+
+@router.post("/create", response_model=CategoryRead, status_code=status.HTTP_201_CREATED)
+async def create_category(
+    payload: CategoryCreate,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    # Enforce per-user unique name via query to provide 409 feedback
+    res = await session.execute(
+        select(Category).where(Category.user_id == user.id, Category.name == payload.name)
+    )
+    existing = res.scalar_one_or_none()
+    if existing:
+        raise HTTPException(status_code=409, detail="Category with this name already exists")
+
+    category = Category(name=payload.name, description=payload.description, user_id=user.id)
+    session.add(category)
+    await session.commit()
+    await session.refresh(category)
+    return category
+
+
+@router.get("/", response_model=List[CategoryRead])
+async def list_categories(
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res = await session.execute(select(Category).where(Category.user_id == user.id))
+    return list(res.scalars())
+
+
+@router.get("/{category_id}", response_model=CategoryRead)
+async def get_category(
+    category_id: int,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res = await session.execute(
+        select(Category).where(Category.id == category_id, Category.user_id == user.id)
+    )
+    category = res.scalar_one_or_none()
+    if not category:
+        raise HTTPException(status_code=404, detail="Category not found")
+    return category
+
+
+@router.delete("/{category_id}", status_code=status.HTTP_204_NO_CONTENT)
+async def delete_category(
+    category_id: int,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res = await session.execute(
+        select(Category.id).where(Category.id == category_id, Category.user_id == user.id)
+    )
+    if res.scalar_one_or_none() is None:
+        raise HTTPException(status_code=404, detail="Category not found")
+
+    await session.execute(
+        delete(Category).where(Category.id == category_id, Category.user_id == user.id)
+    )
+    await session.commit()
+    return None
diff --git a/7project/backend/app/api/transactions.py b/7project/backend/app/api/transactions.py
new file mode 100644
index 0000000..5fc361c
--- /dev/null
+++ b/7project/backend/app/api/transactions.py
@@ -0,0 +1,219 @@
+from typing import List, Optional
+
+from fastapi import APIRouter, Depends, HTTPException, status
+from sqlalchemy import select
+from sqlalchemy.ext.asyncio import AsyncSession
+
+from app.models.transaction import Transaction
+from app.models.categories import Category
+from app.schemas.transaction import (
+    TransactionCreate,
+    TransactionRead,
+    TransactionUpdate,
+)
+from app.services.db import get_async_session
+from app.services.user_service import current_active_user
+from app.models.user import User
+
+router = APIRouter(prefix="/transactions", tags=["transactions"])
+
+
+def _to_read_model(tx: Transaction) -> TransactionRead:
+    return TransactionRead(
+        id=tx.id,
+        amount=tx.amount,
+        description=tx.description,
+        category_ids=[c.id for c in (tx.categories or [])],
+    )
+
+
+@router.post("/create", response_model=TransactionRead, status_code=status.HTTP_201_CREATED)
+async def create_transaction(
+    payload: TransactionCreate,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    tx = Transaction(amount=payload.amount, description=payload.description, user_id=user.id)
+
+    # Attach categories if provided (and owned by user)
+    if payload.category_ids:
+        res = await session.execute(
+            select(Category).where(
+                Category.user_id == user.id, Category.id.in_(payload.category_ids)
+            )
+        )
+        categories = list(res.scalars())
+        if len(categories) != len(set(payload.category_ids)):
+            raise HTTPException(
+                status_code=400,
+                detail="Duplicate category IDs provided or one or more categories not found"
+            )
+        tx.categories = categories
+
+    session.add(tx)
+    await session.commit()
+    await session.refresh(tx)
+    # Ensure categories are loaded
+    await session.refresh(tx, attribute_names=["categories"])
+    return _to_read_model(tx)
+
+
+@router.get("/", response_model=List[TransactionRead])
+async def list_transactions(
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res = await session.execute(
+        select(Transaction).where(Transaction.user_id == user.id).order_by(Transaction.id)
+    )
+    txs = list(res.scalars())
+    # Eagerly load categories for each transaction
+    for tx in txs:
+        await session.refresh(tx, attribute_names=["categories"])
+    return [_to_read_model(tx) for tx in txs]
+
+
+@router.get("/{transaction_id}", response_model=TransactionRead)
+async def get_transaction(
+    transaction_id: int,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res = await session.execute(
+        select(Transaction).where(
+            Transaction.id == transaction_id, Transaction.user_id == user.id
+        )
+    )
+    tx: Optional[Transaction] = res.scalar_one_or_none()
+    if not tx:
+        raise HTTPException(status_code=404, detail="Transaction not found")
+    await session.refresh(tx, attribute_names=["categories"])
+    return _to_read_model(tx)
+
+
+@router.patch("/{transaction_id}/edit", response_model=TransactionRead)
+async def update_transaction(
+    transaction_id: int,
+    payload: TransactionUpdate,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res = await session.execute(
+        select(Transaction).where(
+            Transaction.id == transaction_id, Transaction.user_id == user.id
+        )
+    )
+    tx: Optional[Transaction] = res.scalar_one_or_none()
+    if not tx:
+        raise HTTPException(status_code=404, detail="Transaction not found")
+
+    if payload.amount is not None:
+        tx.amount = payload.amount
+    if payload.description is not None:
+        tx.description = payload.description
+
+    if payload.category_ids is not None:
+        # Preload categories to avoid async lazy-load during assignment
+        await session.refresh(tx, attribute_names=["categories"])
+        if payload.category_ids:
+            # Check for duplicate category IDs in the payload
+            if len(payload.category_ids) != len(set(payload.category_ids)):
+                raise HTTPException(status_code=400, detail="Duplicate category IDs in payload")
+            res = await session.execute(
+                select(Category).where(
+                    Category.user_id == user.id, Category.id.in_(payload.category_ids)
+                )
+            )
+            categories = list(res.scalars())
+            if len(categories) != len(payload.category_ids):
+                raise HTTPException(status_code=400, detail="One or more categories not found")
+            tx.categories = categories
+        else:
+            tx.categories = []
+
+    await session.commit()
+    await session.refresh(tx, attribute_names=["categories"])
+    return _to_read_model(tx)
+
+
+@router.delete("/{transaction_id}/delete", status_code=status.HTTP_204_NO_CONTENT)
+async def delete_transaction(
+    transaction_id: int,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res = await session.execute(
+        select(Transaction).where(
+            Transaction.id == transaction_id, Transaction.user_id == user.id
+        )
+    )
+    tx = res.scalar_one_or_none()
+    if not tx:
+        raise HTTPException(status_code=404, detail="Transaction not found")
+
+    await session.delete(tx)
+    await session.commit()
+    return None
+
+
+@router.post("/{transaction_id}/categories/{category_id}", response_model=TransactionRead)
+async def assign_category(
+    transaction_id: int,
+    category_id: int,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    # Load transaction and category ensuring ownership
+    res_tx = await session.execute(
+        select(Transaction).where(
+            Transaction.id == transaction_id, Transaction.user_id == user.id
+        )
+    )
+    tx: Optional[Transaction] = res_tx.scalar_one_or_none()
+    if not tx:
+        raise HTTPException(status_code=404, detail="Transaction not found")
+
+    res_cat = await session.execute(
+        select(Category).where(Category.id == category_id, Category.user_id == user.id)
+    )
+    cat: Optional[Category] = res_cat.scalar_one_or_none()
+    if not cat:
+        raise HTTPException(status_code=404, detail="Category not found")
+
+    await session.refresh(tx, attribute_names=["categories"])
+    if cat not in tx.categories:
+        tx.categories.append(cat)
+        await session.commit()
+        await session.refresh(tx, attribute_names=["categories"])
+    return _to_read_model(tx)
+
+
+@router.delete("/{transaction_id}/categories/{category_id}", response_model=TransactionRead)
+async def unassign_category(
+    transaction_id: int,
+    category_id: int,
+    session: AsyncSession = Depends(get_async_session),
+    user: User = Depends(current_active_user),
+):
+    res_tx = await session.execute(
+        select(Transaction).where(
+            Transaction.id == transaction_id, Transaction.user_id == user.id
+        )
+    )
+    tx: Optional[Transaction] = res_tx.scalar_one_or_none()
+    if not tx:
+        raise HTTPException(status_code=404, detail="Transaction not found")
+
+    res_cat = await session.execute(
+        select(Category).where(Category.id == category_id, Category.user_id == user.id)
+    )
+    cat: Optional[Category] = res_cat.scalar_one_or_none()
+    if not cat:
+        raise HTTPException(status_code=404, detail="Category not found")
+
+    await session.refresh(tx, attribute_names=["categories"])
+    if cat in tx.categories:
+        tx.categories.remove(cat)
+        await session.commit()
+        await session.refresh(tx, attribute_names=["categories"])
+    return _to_read_model(tx)
diff --git a/7project/backend/app/app.py b/7project/backend/app/app.py
index 423ab2c..61f829a 100644
--- a/7project/backend/app/app.py
+++ b/7project/backend/app/app.py
@@ -3,7 +3,10 @@ from fastapi.middleware.cors import CORSMiddleware
 
 from app.models.user import User
 
-from app.schemas.user import UserCreate, UserRead, UserUpdate
+from app.services.user_service import current_active_verified_user
+from app.api.auth import router as auth_router
+from app.api.categories import router as categories_router
+from app.api.transactions import router as transactions_router
 from app.services.user_service import auth_backend, current_active_verified_user, fastapi_users, get_oauth_provider
 
 fastApi = FastAPI()
@@ -20,29 +23,9 @@ fastApi.add_middleware(
     allow_headers=["*"],
 )
 
-fastApi.include_router(
-    fastapi_users.get_auth_router(auth_backend), prefix="/auth/jwt", tags=["auth"]
-)
-fastApi.include_router(
-    fastapi_users.get_register_router(UserRead, UserCreate),
-    prefix="/auth",
-    tags=["auth"],
-)
-fastApi.include_router(
-    fastapi_users.get_reset_password_router(),
-    prefix="/auth",
-    tags=["auth"],
-)
-fastApi.include_router(
-    fastapi_users.get_verify_router(UserRead),
-    prefix="/auth",
-    tags=["auth"],
-)
-fastApi.include_router(
-    fastapi_users.get_users_router(UserRead, UserUpdate),
-    prefix="/users",
-    tags=["users"],
-)
+app.include_router(auth_router)
+app.include_router(categories_router)
+app.include_router(transactions_router)
 
 fastApi.include_router(
     fastapi_users.get_oauth_router(
diff --git a/7project/backend/app/schemas/category.py b/7project/backend/app/schemas/category.py
new file mode 100644
index 0000000..07fedaf
--- /dev/null
+++ b/7project/backend/app/schemas/category.py
@@ -0,0 +1,16 @@
+from typing import Optional
+from pydantic import BaseModel, ConfigDict
+
+
+class CategoryBase(BaseModel):
+    name: str
+    description: Optional[str] = None
+
+
+class CategoryCreate(CategoryBase):
+    pass
+
+
+class CategoryRead(CategoryBase):
+    id: int
+    model_config = ConfigDict(from_attributes=True)
\ No newline at end of file
diff --git a/7project/backend/app/schemas/transaction.py b/7project/backend/app/schemas/transaction.py
new file mode 100644
index 0000000..9d82b4f
--- /dev/null
+++ b/7project/backend/app/schemas/transaction.py
@@ -0,0 +1,21 @@
+from typing import List, Optional
+from pydantic import BaseModel, Field, ConfigDict
+
+
+class TransactionBase(BaseModel):
+    amount: float = Field(..., gt=-1e18, lt=1e18)
+    description: Optional[str] = None
+
+class TransactionCreate(TransactionBase):
+    category_ids: Optional[List[int]] = None
+
+class TransactionUpdate(BaseModel):
+    amount: Optional[float] = Field(None, gt=-1e18, lt=1e18)
+    description: Optional[str] = None
+    category_ids: Optional[List[int]] = None
+
+class TransactionRead(TransactionBase):
+    id: int
+    category_ids: List[int] = []
+
+    model_config = ConfigDict(from_attributes=True)
diff --git a/7project/backend/app/schemas/user.py b/7project/backend/app/schemas/user.py
index b5ae272..bb4bd4f 100644
--- a/7project/backend/app/schemas/user.py
+++ b/7project/backend/app/schemas/user.py
@@ -4,13 +4,13 @@ from fastapi_users import schemas
 
 class UserRead(schemas.BaseUser[uuid.UUID]):
     first_name: Optional[str] = None
-    surname: Optional[str] = None
+    last_name: Optional[str] = None
 
 class UserCreate(schemas.BaseUserCreate):
     first_name: Optional[str] = None
-    surname: Optional[str] = None
+    last_name: Optional[str] = None
 
 class UserUpdate(schemas.BaseUserUpdate):
     first_name: Optional[str] = None
-    surname: Optional[str] = None
+    last_name: Optional[str] = None