I agree with geojen that if it is just you and your wife, the grocery budget is pretty high. DBF and I live in San Diego (high cost of living area) and I budget $400/mo for groceries. We usually spend about $350 and we could pretty easily cut that back to $250-$300ish if I made the effort.
Its good you sat down and got a good idea of what you are spending and where. Now its just a matter of deciding where you can cut back.
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