The best way to budget for unexpected expenses is by creating sub-categories in your budget that cover them. This is why it is best to start with smaller categories. You may have some money in sub-categories that you don’t touch. They could come in handy later on. For instance, if you keep putting $50 in appliances every month, and you don’t spend it on anything for 6 months, if you need to fix your washing machine in the 7th month, the $300 you’ve saved can be used to settle it.