not enough storage

Empty Space Requirements  >> If upgrading from macOS Sierra or later, your Mac needs 26GB of available storage to upgrade. If upgrading from an earlier release, your Mac needs up to 44GB of available storage. 

Tips Monterey Upgrade - might give some additional information about how to avoid a failed upGrade.

Ah the computer has the tiny 128 GB SSD. This sized SSD should have never been offered at time of purchase. This size is almost useless to to anything meaningful. But alas, it is what it is.

Even after having performed any of the suggested Recommendations and still not enough Empty Space. This is going to be challenge.

Do a Time Machine Backup before moving forwards.

Understand - what is going be suggested is with extreme caution and as a last restore.

One may consider alternatives like moving up to a lesser version of macOS than Monterey

The below will Wipe the Entire Drive of all Data including the Recovery Volume. There is not recovery - period.

To perform this action will require booting from a Bootable Installer.

This will have to be performed from a Qualifying Computer to run the version of macOS to be made on the Bootable Installer. Example : Bootable Installer of Monterey would have to be done on a computer that Qualifies to run Monterey.

Once that is done read on for preparing the Destination computer >>

Only works on Intel Based Apple Computers.

Extra Special Notation regarding the Touch ID equipped Apple Computer. About Startup Security Utility and Must Enable from Recovery Mode the ability to boot from External Drive Before Attempting 

1 - Shutdown computer and disconnect all external drive Except the newly created Bootable Installer.

2- Restart and immediately hold the OPTION key until the Startup Manager appears and choose the USB Drive.

3 - It will present options >> Disk Utilities >> View >> View ALL attached Drives.

4 - Choose the Upper Most Drive ( not the volumes indented and list below ).

5 - The drive normally is called Apple Media or Apple SSD - that is the drive to Erase and format as APFS with the GUID Partition Map..

6 - Once that is done >> backup out of Disk Utilities and choose install macOS.

7 - Follow the prompts and it may automatically reboot several time.

8 - Upon a final reboot - Setup Assist will present with the newer version of macOS.

Installing a MacOS upgrade is a good opportunity to do some housekeeping.

• uninstall any app that you never or rarely use
• uninstall any Anti-virus or Clean-up apps (not need on Macs)
• delete any old downloads which you don’t need
• use iCloud to store documents & photos etc
• go to About This Mac -> Storage -> Manage and see if you can gain any more space.

It's generally recommended good practice to keep a minimum of 50 GB of free space on you Mac at all times (more if possible) to promote optimal system and application performance.

The files that you have control over are located in the Documents, Downloads, Pictures, Music and Movies folders.  You can use either of these two free apps, GrandPerspective  or OmniDiscSweeper, to find the largest files on your drive so you can determine if they can be deleted or moved to an external HD for storage.  

Note: you can empty the Downloads folder after the apps and/or updates that were downloaded have been installed or applied.  Many users have found a couple of Gigabytes of files in their Downloads folder which are no longer needed. 

See:

What is “Other” storage on a Mac, and how… - Apple Community