Siding has a tendency to rot along the bottom where rain splashes up and moistens the bottom of the wood that normally does not get painted. In the picture below you can see an extreme example of this.
When the budget is small, there is a way around changing out the entire sheet of siding and it can also prevent further damage to the house. In the picture below, you can see where we went over the rot with treated 1×4’s and it now looks like it belongs there.
You must take care to caulk the top edge really well so additional water does not penetrate, and also make sure when you cover the rot that there are no openings that ants or other small insects can get through. Take care to paint the UNDERSIDE of the board as well that faces the ground so it will keep it from rotting in the future.