Working with Outlook

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Using the Master Category List

You can create a category "on the fly" by typing it into the Categories field of an Outlook item. You don't have to use the Master Category List.

BUT...

If you create a new category by typing it into the Categories field, rather than by going through the Master Category List, Outlook won't add that category to the master list, so your new category won't appear in the Available categories list the next time you want to assign that category to an item. You'll have to type it in again, just like the first time.

If, on the other hand, you add a new category to the Master Category List, that category will appear in the Available categories list every time you use categories.