I would not walk your pup with a collar at all, especially because he is tiny and pulling. Yorkies are prone to collapsed trachea, a terrible and ultimately deadly condition.
I have read that other people with tiny Yorkies have used either cat or ferret harnesses, both are inexpensive. It would be worth spending a few extra dollars at the pet store for one while you wait for your Buddy Belt to arrive.
For sizing, I think I would order the size 2 for your pup. That way you will have room to put it over clothes or accommodate your pup's potential growth over the next few months.
Let me see if I can find the name of the online store that many people here ordered from and had positive experiences, including exchanges.