"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.

Canadian banks are fairly heavily regulated and are more used to carrying their own mortgages, so we are told that our mortggage situation isn't nearly as troublesome as in the U.S. There seems to have been a pause in house prices, even a slight drop in some areas, but not a serious issue at present. There is a sagging in the economy, though ... and will be more so, as our economy is very closely linked to the U.S. one: we say that when the U.S. economy gets a sniffle ... ours gets pneumonia. I've lived in about 22 locations during my 79 years ... have never owned a home. Current 2 br. farmhouse costs under $500.00/mo., includes water, o.k. for washing, not for drinking or most cooking, but I pay for power to run the pump. Rent not including oil furnace heat and power. Income from my three pensions has increased slightly, quarterly. I expect it to continue so. I have some income from a small personal tax-deferred retirement plan: my enthusiasm for that system has decreased substantially in recent years. That income has increased annually, but the required percentage withdrawal increases annually, so soon it will begin to decline, annually. I'm not worried about that. I live within my pension income, thus far can save some for other purposes. My investment income has taken a hit - one substantial situation, our largest telco, known as a "widows' and orphans' stock", was to be sold, to be bought at a premium price by a large pension plan and taken private ... the deal set up just before the U.S. financial debacle ... and completion has been postponed several times. During that time ... they stopped paying dividends! Then last month their auditors told them that the deal isn't viable ... would put them too deep into debt. Share price dropped from $38.35 close the day before the announcement to $25.25 next day. I fully expect them to reinstate dividend, and soon, maybe even paying the omitted ones. But it'll be a long time till I recover the price that I paid for some of the stock. GGrr-rr-r-r-u-u-m-m-ppp! Another company, a base metal miner and processor that I bought early this year had share price go up over 1/3 by May ... then slid back to purchase price by about Sept. They'd bought a major coal co. for possibly a high price, with short-term bridge financing, are worried that recession may cut metallurgical coal shipments, they may have trouble financing. They've stopped paying dividends, as well. Stock price closed last week at slightly over 1-10th the amount that I paid in Jan. I'd bought more a month ago for nearly double the current price per share. GGrr-rr-r-r-u-u-m-m-ppp, again! Thinking of buying more, now, though. Ed - are you crazy? I don't think that the company will die, but will recover. A Canadian bank stock whose price at $107.00 was high in May '07 raised dividend from $3.08 in fall '07 to $3.48 ... and have maintained it, thus far. But they had substantial exposure to the U.S. financial problems ... the share price dropped to a low of $42.36 or so, last month ... now $50.00 ... a long way down from that $107. a year and a half ago: but they continue to pay the dividend, at the rate established last fall. A slight ray of satisfaction can be gained from the realization that at a share price of about $90.00 a year ago, the rate of return was 3.87% (tax-advantaged) ... ... and now, at share price of $50.00, is 6.96% (tax-advantaged) ... rather unusually high, for a bank! ole joyful P.S. I'm digging up some more stock and mutual fund certificates, these days, to take to my lender to increase the limit on my Line of Credit. I'd thought that I'd have had some funds available from the forced sale of the telco, several months ago. Then deferred ... was to complete on Thursday, this week. Now, those funds are not available. But stocks are on sale. So I want to buy some. That's what that currently unused Line of Credit is for! o j

Hi, Ole Joyful! That is basically what we did. Sat down over 20 years ago with my husband and showed him how our savings pattern (at that time) would not be enough. We had already brought our house for less than half of what the RE agent said we qualified for. So we started socking it away. Then a friend gave me the name of a good investment advisor. That was the missing key. We are now at the point where we have enough savings and no debt except monthly charges, which are paid in full. We don't shop for entertainment and have lots of free museums, etc. in our area. We do spend on travel. It helped that we have decent jobs, but living well below our means and investing made a huge difference.

The 8 x 10 looks fine to me. I'm sure you have seen this graphic before (see below), you don't even need to put the entire sofa on the rug if you want to go a little bit smaller. Consider just the front legs of the sofa on the area rug like the middle sketch shows below