You can use YNAB's default set of categories, create new ones, move categories around, and edit existing category names.
Creating a new Master Category
Click on the + sign at the top of the Budget above the list of categories.
Enter the name of the new Master Category and click Done. A new Master Category appears at the top of the Budget.
Clicking the triangle to the left of a Master Category will collapse the view and hide the related Categories. Clicking the arrow again will expand the view to show all related Categories.
Creating a new Category
Hover over a Master Category and click on the + sign that appears to add a new Category to a Master Category.
Enter a name for the new Category and click Done. The new Category is created under the Master Category at the bottom of the list.
Editing existing Categories
Click the name of the Category and a pop-up will appear.
Type a new name (or choose delete if it's a Category you will not be using) then click Done.
Changing the category column width.
Hover over the gray area between the category and budget cells. Click, hold and drag to change the width.
Creating categories from within the register
Select Add Category at the bottom of the choices in the Category drop-down menu.
YNAB will then ask you which Master Category you would like to associate it with, or you may create a new one. Once you choose the Master Category, you will be able to type in the name of the new Category.
Master Categories and Categories created here will appear on the Budget.
Click and hold the category name (the cursor should be changed to a hand), then drag that category or master category wherever you'd like in the list.
A gray line will appear in the new location. When you have relocated it to the new position, let go.
Before deleting a Category, make sure there are no transactions associated with it. If you don’t want to see or use a Category any more that has transactions associated with it, it’s recommended that you hide it.
For example: You pay off a student loan and you don’t need that Category showing on the Budget, you should hide it. (see below)
To delete a Category or Master Category, click the name of the Category and then click on the red link that appears in the pop-up box.
When you hide a Category, it is no longer visible on the Budget. However, all the transactions associated with that Category are still intact.
Click the name of the Category and then click on the blue link that appears in the pop-up box. All hidden Categories are placed at the bottom of the list of Categories.
Hover over “Hidden Categories” at the bottom of the budget screen. A link will appear entitled Unhide. Click on the link and a list of hidden Categories will appear. Select the Category you want to view again.
Click on the All Accounts tab in the sidebar.
In the register search for the Categories you'd like to merge. Select all, right click, select Categorize As and choose your new Category. Then on the Budget, reassign the money from the discontinued Category and add it to the Category you are keeping. Then you can delete the discontinued Category.
YNAB comes with a default set of categories, but you can organize your budget anyway you want. Here are a few alternatives:
Mandatory and Optional
Place all the categories you absolutely have to pay under mandatory. Anything that you hope you can afford but you aren’t sure you have the money for would be organized under optional. Budget for all the mandatory expenses first.
Set up a master category for each week. Drag the bills you pay in the first week of the month to week one, and so on.
Due Dates and Amounts
You can even include the due date and amount due and drag them into date order.
You can place all your savings goals under one master category and include the total amount you are saving and the amount you are trying to save each month.
Choose whatever way makes the most sense to you!