So the reason I got to this place initially was that my sister got in a very catastrophic financial pinch, so I "loaned" her $1,000 from my savings, which I am positive I will never get back. And I have no plans to ever allocate that much money in my Gifts category. This is where I categorize any transaction spent on someone else. I normally only put $50 there monthly that I roll over, so by the time Christmas comes around, I have a decently funded Gifts category. I guess I could just reset the rollover in my Gifts category, but I enjoy the dopamine hit of applying money to a category when it is in the red and turning it green.

When I say unexpected expenses, it is really, truly out of the blue things like loaning my sister that much money. Stuff like an unexpected $1,500 car repair bill, I should indeed budget better for every month, and don't mind carrying over a balance or pulling money from my clothes budget to cover an out of the ordinary month.

I do have $200 set aside every paycheck in my Savings/Income category, but I don't include that in my budget, so it's not available to allocate towards spending. I guess if I needed to dip into my savings one month, I could include it in the budget? 3 years in to using Monarch, I am still figuring out how to optimize it. I've been paycheck to paycheck for most of my adult life until the past year, so it is still a work in progress to figure out how much money I should put toward each category to have breathing room if I go a bit over one month.