I am well aware we spend more than about anybody who frequents financial blogs.
Not necessarily true. Plenty of us just don't post things we know others would criticize. (In my case, it's because I don't particularly want to change them and don't "need" to.) But since you're trying to get your cash flow in balance AND that number is high, definitely take a close look.
One thing I have done in the past when trying to track food expenses is to: 1. Separate out grocery from household items, as you mentioned, and 2. Buy larger quantities of household goods less often. For some reason, that's been helpful for me. A friend of mine did this to simplify her shopping - she'd buy a year's supply of most household items every January. I'm not there (yet), but having stock on hand so you only have to go to Target once every three months instead of twice a month can REALLY be helpful, especially if you find yourself thinking at the checkout how you never get out of Target without spending less than $100.
An extra drawer or dresser can store lots of the items - soap, shampoo, razors, toothpaste, contact solution. So when you're out of something, you "shop" in your own stuff.
Another way to save money on food might be to make certain nights always the same for dinner, and make them cheap nights. For instance, I just joined our town's CSA and as part of that get a fresh loaf of bread and goat cheese every week, so Tuesdays has become bread & cheese night. SO GOOD! You could do easy quesadillas or enchiladas. Or breakfast for dinner. That sort of thing.
Oh, and as for the pool - that probably costs less than taking the family to a movie once a month, and as they grow up, it's where all their friends will be, and it can provide exercise and social interaction for you, too, so I'd say it's a worthwhile expense.
