Monarch Money Setup: What to Do First

New to Monarch Money? Here are the 6 steps I walk my coaching clients through: link accounts, clean up categories, set up rules, and build your first budget.

Signed up for Monarch Money and not sure where to start? You’re not alone. These are the same steps I’ve walked dozens of my coaching clients through. The order matters, because most people jump straight to the budget and end up working with messy data.

▶️ Watch the full video (or read on)

🔗 Step 1: Link Your Accounts

Start by connecting every account that has money moving in or out, even if it’s not very often.

Link your checking, savings, and any other accounts you use from the Accounts tab
Rename them so they make sense. “Main Checking” or “Emergency Fund” is a lot easier to read than “Chase 00 5493”
For most people, I don’t recommend linking Venmo or PayPal. If you only use them a couple of times a month, it’s not worth it. If you use them a lot, it probably is.

🗂️ Step 2: Clean Up Your Categories

Do this before you create a budget. Monarch starts you with about 60 preset categories, and you won’t need all of them.

Go to Settings → Categories, then rename them and change the emojis to fit your life (like “My Paycheck” and “Husband’s Paycheck”)
You can’t technically delete categories, but you can deactivate them so they don’t show up in your budget
If a category you’re deactivating already has transactions, you can move them to another category, like coffee shops into restaurants
Not sure where they belong? Move them to Uncategorized for now and deal with them later

🧾 Step 3: Review Your Transactions & Create Rules

In my experience, about 75% of transactions get categorized correctly on their own. The other 25% need some help.

Go through at least one full month of transactions. Three months is even better, since Monarch uses a 3-month average when you budget.
When something’s wrong, click the category and pick the right one
If it’s a purchase you make regularly, click Create Rule when the pop-up appears so it’s categorized correctly from then on
Move quickly, though. That pop-up only stays up for about 5 seconds.
Rules can get pretty specific. For example: “if it’s Venmo and this amount, it’s piano lessons.”

🔄 Step 4: Check Your Transfers

Filter your transactions by Transfer to see every Venmo, Zelle, PayPal, and account-to-account move.

If you didn’t link Venmo or PayPal, a payment to someone, like your preschool teacher, will show up as a transfer. Recategorize it as the real expense.
If you did link them, you’ll see two transactions for each payment. The move from checking to Venmo stays a transfer. The payment from Venmo to your friend is the actual expense.
That’s exactly why I usually keep things simple and skip linking them.

📊 Step 5: Create Your Budget

Now that everything is cleaned up, head to the Budget tab and go category by category.

Click each category to see your last 3 months and the average
Use the average unless you know this month will be higher. Three months gives you a much more accurate picture than one.
Don’t skip categories with no budget yet. They might be new expenses.
The number on the right is how much you have left to assign. Your goal is to get it to zero or green.

The bottom line: Clean data first, budget second. It takes a little time up front, but your budget will actually reflect how you spend.

👉 Want more help with Monarch? My Monarch Money course walks you through setup step by step. Monarch Money 101 Course

Don’t have Monarch yet? You can try it here: Get 50% off Monarch Money (an affiliate link)

Categories: : BUDGETING APPS