Category detail level
Keep similar transactions together. Create another category when some transactions need a separate budget, tax rule, report, or automation.
Category groups and selectable categories
Groups only organize the category list. Transactions use the final selectable categories. A category name should state the kind of income or expense it contains.
Uncategorized transactions
The data-quality report lists uncategorized transactions and repeated descriptions. If the same kind of transaction appears regularly, you can create a category and an automatic classification rule.
Category merging
Merging moves transactions and rules from one category into another. Before saving, check budgets and automations that use the category being removed.