Randy, a few thoughts.
Overall this is a pretty cool planning (not budgting) tool for helping you set some savings goals. However, I agree with others that having one dedicated account for the savings may not work for most folks. I know for me, I have several accounts that I use for different types of savings goals. Maybe an alternate way of thinking about it is having the person set a starting amount so the whole account balance is not allocated to one savings goal.
I also dont think you should use the transfer category to track these items. As you stated, you try to keep the transfers in balance at all times. Being able to see that both sides of the transfer happened is really key and easily seeing it with a zero balance helps. This is important and I dont think you should break that rule, especially when you can just as easiliy create a new type. My suggestion, keep transfer just for actual money transfers between banks accounts. Add a new category for savings if you want to allocate funds for savings. For me this is why I created the Funding transaction sheet in my envelope sheet. It is just a way to allocate funds vs spend them.
Lastly, my only comment on the sheet is it looks very passive. It is hard to tell as I cant see how it works. but, it would be great if it actually showed what money it was assuming would be saved and then allowed you to tweak the numbers to do what-if planning.
I know I said lastly above, but really my last point is, it is awesome that you are using the community to bounce these ideas off of. Thanks for being open to the feedback.
Rich