diff --git a/app/Actions/CreateDefaultCategories.php b/app/Actions/CreateDefaultCategories.php
index 0e518678..e24196fe 100644
--- a/app/Actions/CreateDefaultCategories.php
+++ b/app/Actions/CreateDefaultCategories.php
@@ -11,6 +11,10 @@ class CreateDefaultCategories
      */
     public function handle(User $user): void
     {
+        if ($user->categories()->exists()) {
+            return;
+        }
+
         $defaultCategories = self::getDefaultCategories();
 
         foreach ($defaultCategories as $category) {
diff --git a/database/factories/CategoryFactory.php b/database/factories/CategoryFactory.php
index 7f0d9eb6..7f701e5c 100644
--- a/database/factories/CategoryFactory.php
+++ b/database/factories/CategoryFactory.php
@@ -18,7 +18,7 @@ class CategoryFactory extends Factory
     public function definition(): array
     {
         return [
-            'name' => fake()->randomElement(['Food', 'Transport', 'Entertainment', 'Shopping', 'Healthcare', 'Utilities', 'Travel', 'Education']),
+            'name' => fake()->unique()->randomElement(['Food', 'Transport', 'Entertainment', 'Shopping', 'Healthcare', 'Utilities', 'Travel', 'Education', 'Bills', 'Investments', 'Savings', 'Insurance', 'Gifts', 'Personal Care', 'Sports', 'Hobbies', 'Subscriptions', 'Dining', 'Groceries', 'Clothing']),
             'icon' => fake()->randomElement(['AlertCircle', 'AlertTriangle', 'ArrowDownCircle', 'ArrowLeftRight', 'ArrowUpCircle', 'Baby', 'Banknote', 'Briefcase', 'Building', 'Building2', 'Car', 'Clock', 'CreditCard', 'Dices', 'FileText', 'Gift', 'GraduationCap', 'HandHeart', 'Heart', 'HelpCircle', 'Home', 'Landmark', 'Mail', 'PiggyBank', 'Plane', 'Receipt', 'ReceiptText', 'Repeat', 'RotateCcw', 'Scale', 'Shield', 'ShieldCheck', 'ShoppingBag', 'TrendingUp', 'Undo2', 'Users', 'Users2', 'Utensils', 'Wallet']),
             'color' => fake()->randomElement(['amber', 'blue', 'cyan', 'emerald', 'gray', 'green', 'indigo', 'orange', 'pink', 'purple', 'red', 'slate', 'teal', 'yellow']),
             'user_id' => User::factory(),
diff --git a/database/migrations/2025_12_01_101443_add_unique_constraint_to_categories_table.php b/database/migrations/2025_12_01_101443_add_unique_constraint_to_categories_table.php
new file mode 100644
index 00000000..b4854af5
--- /dev/null
+++ b/database/migrations/2025_12_01_101443_add_unique_constraint_to_categories_table.php
@@ -0,0 +1,28 @@
+<?php
+
+use Illuminate\Database\Migrations\Migration;
+use Illuminate\Database\Schema\Blueprint;
+use Illuminate\Support\Facades\Schema;
+
+return new class extends Migration
+{
+    /**
+     * Run the migrations.
+     */
+    public function up(): void
+    {
+        Schema::table('categories', function (Blueprint $table) {
+            $table->unique(['user_id', 'name']);
+        });
+    }
+
+    /**
+     * Reverse the migrations.
+     */
+    public function down(): void
+    {
+        Schema::table('categories', function (Blueprint $table) {
+            $table->dropUnique(['user_id', 'name']);
+        });
+    }
+};
diff --git a/tests/Feature/Settings/CategoryTest.php b/tests/Feature/Settings/CategoryTest.php
index c151d757..dd044152 100644
--- a/tests/Feature/Settings/CategoryTest.php
+++ b/tests/Feature/Settings/CategoryTest.php
@@ -188,3 +188,36 @@ test('default categories are created when user registers', function () {
     $categoryNames = $user->categories->pluck('name')->toArray();
     expect($categoryNames)->toContain('Food', 'Transportation', 'Salary', 'Insurance');
 });
+
+test('default categories are not created twice for the same user', function () {
+    $user = User::factory()->create();
+
+    $service = new \App\Actions\CreateDefaultCategories;
+    $service->handle($user);
+
+    expect($user->categories()->count())->toBe(63);
+
+    $service->handle($user);
+
+    expect($user->categories()->count())->toBe(63);
+});
+
+test('category names are unique per user', function () {
+    $user = User::factory()->create();
+
+    $category = $user->categories()->create([
+        'name' => 'Test Category',
+        'icon' => 'Tag',
+        'color' => 'red',
+    ]);
+
+    expect($category)->toBeInstanceOf(\App\Models\Category::class);
+
+    $this->expectException(\Illuminate\Database\UniqueConstraintViolationException::class);
+
+    $user->categories()->create([
+        'name' => 'Test Category',
+        'icon' => 'Tag',
+        'color' => 'blue',
+    ]);
+});