giliji and others, the one thing I would add to the excellent advice is don't wait for the bills to come in before you start paying them. For insurance, power, water, council rates etc I have automatic payments coming out monthly so there are very few bills that come as a shock. It also stops me frittering money away just because it's sitting there.
It sounds radical if you're struggling to pay bills now, but it's something to aim for.
I've also found the internet useful for finding websites that tell you how to cut expenses and become cash flow positive.
I don't know how you can handle a saboteur though, except to quarantine the money from him.