Hey Justin,
I’ve moved your post to this topic, to keep all of the discussion about this request in one place.
I’m keen to use this improvement too! Since the targets are based on categories, I assume that once we can categorise incoming payments, the targets will also pick up these credits 
Monzo’s said that this will be solved by version 1 of the bill splitting feature (we have version 0 at the moment), which is on the roadmap here -