I've yet to meet someone who had an unlimited income, so pretty much every budget book or program is designed for people with fixed resources. If you know the exact amount you get each month, that actually makes budgeting easier than someone who is making commission or is self employed.

I personally like Davey Ramsey for his books and websites. He's entertaining and easy to read/listen to.

All the decent budget people are preaching the same message though. You need a spending plan on paper before you get the money. That plan needs to have some money set aside to help build up an emergency fund. That means you need to be spending less than you bring in every month, but then you'll have a pot of money to fall back on when you have these unexpected issues.

That's cool. I know our monthly income and our regular expenses- car and house insurance, smallish mortgage, state property tax, utilities are fairly regular, satellite TV, plus we need money for gas and groceries, and we need probably $1000 a month for "emergencies".So I can start there and make up a budget for these usual bills, plus amounts for entertainment and gifts. I remember a teacher in high school said "pay yourself first", meaning savings are the first thing, not whatever is the "leftover" in a budget.

You also need to account for inflation. In 25 yrs your money will be worth only 50% of what it is now in buying power, especially when inflation returns. That's not an IF, it's a WHEN.

Making a realistic budget means planning for the worst that can happen, not the best.

In your case, I think it would be good to set up a short term budget and then a long term plan.

Step 1 really needs to be setting up a budget lets you build enough of an emergency fund so that an unexpected car repair doesn't cause you to go hungry.

step 2 happens when you have an emergency fund built up. Then you can use the money you were setting aside for emergencies to build up some longer term savings. You can also look at how long it is going to take to pay off your house and no longer have to have a mortgage payment as part of your fixed expenses.

The process is fairly simple, but that doesn't mean it is easy. If you are used to basically spending 100% of your income, it is a bit of an adjustment to stick to a budget. The most important part is that both you and your husband are committed to the plan and excited about the possibility of getting on better financial footing. If you don't have that excitement, the cutbacks can feel like a punishment instead of an opportunity.

Thanks for the tips. The first step is a big meeting between mee and hubby.

It's older then dirt, but the envelope method is a good way to get started on a budget. List all of your fixed bills(rent, utilities, insurance, car payments). Take your income, subtract 10% off the top for savings/emergencies and then subtract the amount you need to pay your fixed bills. Take the rest of your money, in cash, and put it into 4 envelopes. Whatever is in the envelope is how much you can spend for this week. That way, you won't be broke before the next check comes in. In time, you will have formed the habit of not spending more then 1/4 of your money in any week.

If you were looking for books for example written by Dave Ramsey, look at garage sales or used book stores. Is there anyway either of you could do anything at home? Do you use coupons? Some generic brands are better than others. I don't like most of Sam's (Walmart) brands because of the ingredients. Are you in an area you could raise some of your veggies and then freeze them? There are many ways to save on foods by doing just reading cooking magazines--again found at garage sales, friends, some thrift stores. Many stores have sales areas, but do watch, some are not as good as they seem. Do you have any stores that sell bulk items, like rice, flour, and other items--You buy what you need. Do you want some receipes to make some really good meals? If so let me know. Are you in an area where there is fresh fruits and veggies? If so, ask the people if you could pick some up from the ground, and you can cook/freeze. Hope this helps.

Just thought of something else, if you sew, mend etc you could trade repairing clothes for what ever you need.

Forget Dave Ramsey. Just keep a extremely accurate detail on where your money is going. Even if you purchase a 10 cent piece of gum - you should have a spending catagory that reflects that.

Get the 'picture' of your spending down in black and white for one month. Use Quicken or your bank's financial tools to do so.

That said, sounds like you still need another income stream instead cutting expenses.

Thanks for all the good advice. I'll take it into account.

"Is there a website or budget or book or anything you can recommend?"

The Dollar Stretcher has a good website. The guy who runs it is a retired financial advisor.

A link that might be useful:

www.stretcher.com/index.cfm

Jannie, when you said "Stock up on grocery sales" it was a red flag for me. Processed foods and meat (which is usually what is on sale) are not your best $$ value. Consider making more meals from scratch if your health issues will allow you to do so. Fresh fruit and fresh or frozen veggies should not be stockpiled, but your menu should center on them. Good whole wheat bread is cheaper if you make it. White bread is just empty calories. Ditto for snacks and anything with sugar in it.

As billl said, we are all on a fixed income. The challenge is living below our means so that we also have savings. I hope this helps.

To be picky, I doubt that we're all on a fixed income, which is: "An income from a pension or investment that is set at a particular figure and does not vary (as a dividend) or rise with the rate of inflation." Of course, people don't have unlimited income, but that is not the opposite of fixed income.

That said, I'm now retired and needing to budget more carefully than when I was employed. So, I'm also interested in the advice given here!

Choices. It is all about choices.

We are living on a fixed income and have found that we have to make a whole new set of choices. Grocery Outlet has become our go-to store. Eating out is very rare, making it even more of a special event. My library card gets much more use now. We do not have cable television by choice and spend lots of time visiting with each other. Our eating habits have changed and we don't miss the old ways at all. Gave up the latte habit, the McDonalds habit and think twice before a purchase. Do I really need that five/ten dollar thing or would I rather have the money?? Could the money be put to better use? Is it a want or a need? We buy most of our clothing on the secondary market (thrift stores) now and accept hand me down electronics when others upgrade.

Everyone's situation is different. Hope some of this helps.

"To be picky, I doubt that we're all on a fixed income, which is: "An income from a pension or investment that is set at a particular figure and does not vary (as a dividend) or rise with the rate of inflation." Of course, people don't have unlimited income, but that is not the opposite of fixed income. "

Well, in the US, nobody is on a "fixed income" by that definition. SS etc is all indexed, so not even retirees are truly fixed.

In terms of budgeting though, most people have a fixed income for any reasonable budget period - months, a year etc. It is a lot simpler to budget on that type of income than for people with sales jobs etc that work on varying commissions.

I think there is a big difference between asking "How do I budget?" and "How do I spend less?" If you've planned properly for retirement, then you still need to budget but don't necessarily need to cut spending.

Example - you need to put emergency purchases on a credit card, but you have the cash flow to pay that card off during the year. In that case, you actually have enough money to save/spend, you just need a more organized way to do it so you save BEFORE the expense, not AFTER.

"Well, in the US, nobody is on a "fixed income" by that definition. SS etc is all indexed, so not even retirees are truly fixed."

I agree!

In fact, the people on SS get better COLA increases than my husband does.

I cringe every time I hear "fixed income"....

Sorry to burst your balloon, but there haven't been SS increases in three years now.

Budgeting will help, but only if there's enough income to balance the outgo. Can you increase your income and/or reduce expenses?

Is a reverse mortgage an option? (Not old enough?) Would it work to sell your house and invest the money while you rent -- or buy something cheaper? Is there any subsidized housing available to you? (Maybe closer to the medical care you need?)

"Sorry to burst your balloon, but there haven't been SS increases in three years now."

??
what balloon?

I said: "In fact, the people on SS get better COLA increases than my husband does."

And they do.

"Sorry to burst your balloon, but there haven't been SS increases in three years now."

That is because they got a big increase 4 years ago when oil prices spiked and overall inflation hasn't caught up to that yet. By law, SS is indexed.