One of the inspirations in my journey was Rhonda at http://down---to---earth.blogspot.com.au. She and her husband live happily on the old age pension (30k for two) with a paid off home. That someone could live comfortably and happily "on benefits" was a complete eye-opener for me and basically life changing. She is in a different age group but tries to make her writing relevant to all age groups. You might find some tips there e.g. making your own laundry detergent, that will help you save more.
Oh my word, how did I not know about this lady before? She's going straight in my RSS feed! I've only had a small poke around her blog, but if I can turn out to be a tenth as awesome as Rhonda is when I'm her age, I'll count my life as having been very well lived indeed.
Could hubby do some evening work part-time? Not thinking of longterm career options here but casual stuff like working in restaurants, packing supermarket shelves etc.
That's something we really need to have another look at. DH has been so focussed on his studies that the job searching has taken a back seat. I'm OK with that, though, as I'd rather he focus now and pass his course than try to take on too much and burn out (it's happened in the past; depression is a manky bitch). With any luck he'll be in position health-wise to start taking clients at the end of the year, whether he decides to go on and do a full Bachelor in counselling or just stick with the diploma.
My take is that you both need to be working full time. I can't see how to cut much of your budget but I would ask why you both need mobile's and why you are giving to charity. I lived without a mobile when I was earning $60k per year and now that I have a fancy smart phone I really think that these things are overrated.
At this point, full-time work isn't an option I'd be comfortable with either of us taking even if it was available. DH's mental health is more important to me than almost any amount of money we could be earning. It frustrates the hell out of me sometimes (hence my original post), but given the steady improvements over the last few years, I'm optimistic that it's a likely choice in the future. (To put that statement in perspective, two years ago DH's depression was so debilitating he was being referred back and forth to be put on a disability pension. The fact that he's more or less functional on a day-to-day basis now, still blows my mind occasionally.)
You're right about the mobiles and the monthly donations, though. Logically, I know we can't really afford to be donating money to other people. Emotionally, it's damned hard to let go of that "but we need to be helping out the less fortunate, because we have spare cash now, and that means we're not really broke, right?" mentality. **cues up punch in the face** I know MMM wrote an article on giving and stuff after FIRE, I think I need to go reread it.
I would basically be focusing on earning more money, saving as much as possible and looking then to buy a cheap house. I don't think houses are the best investments especially at the prices they are now but once you pay one off and you are living rent free things look a lot better.
I definitely wouldn't be looking at a home as an investment. For me a house is a non-monetary stability factor, a safe haven from the world, and owning my own means I can do whatever the hell I like with it and not have to suffer the indignity of quarterly inspections. Plus we'd save something like AU$8-10K a year living rent free, even factoring in home maintenance and insurance.