The envelope system=greatest idea since sliced bread

What is the envelope system?
Put everything you absolutely can on automatic payments. This is where the bank issues a check from you account, and pays that money automatically- to whoever you issue it to eg. utilities, car payment, student loans, insurance, mortgage etc. After this is done, every thing else is expendable. This would be food, clothing, home maintenance, toiletries, fun money etc. At the beginning of the month, figure out how much money you want to spend in each of these categories. after you decide, put the money for each category in to a separate envelope, in cash.
We spend 400 a month on food. I keep that money in an envelope and take it to the store each time I go shopping. I keep a running total of the balance on the front of the envelope. When the money is gone, we don't go again. If we have extra money at the end of the month we splurge. We do this with each category. We have been able to free up so much extra cash to go toward paying off debt, by using the envelope system. It is so much more organized than swiping a debit card at every whim.
Hurray for gazelle intensity- we will be out of debt in April of 2012. Yeah! Thanks for teaching us Mr. Dave Ramsey!!

Highly Recomend this class!

OK,
So Hubbin and I have been taking a class. It is taught by Dave Ramsey. He is a great teacher, and we are learning a ton. I am going to really emphasize here that I think you should take his class or buy his book.
He teaches the 3 month course in baby steps.
Wait I need to get permission to tell you what to do.
http://www.daveramsey.com

OK,
I got everything ok'd. Now I can tell you all I know. Tom and I plan to attack our debt with "Gazelle" intensity. We figure that we can get out of debt in 3 years, and our mortgage in another 5.
Dave Ramsey talks about how we should run from debt with Gazelle intensity. We have our budget set. We are using cash for everything that we can't put on instant pay from the bank. We have separate envelopes that we put all of our money in. One for food, toiletries, vacation, school supplies, hair care, fun money, laundry care, clothing, home repair, etc. The only thing we use our debit card for now is gas. I had a target credit card that I used for "blow money". There was a $200 balance, and I rarely maxed it out, but I had it on auto pay, to pay off every month. We cut up the card for Family Home Evening. Now Baby3 can frequently be found walking around the house chanting "No more debt".
I love the freedom of the budget, and not feeling bad about spending money because, now it is allocated.
Hubbin has been needing a new pair of shoes, but I never felt justified in spending the money for them. Well, now that it is in the budget, we have the money for them.
The one envelope that I am not sure of is the food envelope. We have $320 for the month for food. I am just not sure if I can spend $80 a week, or some times less.
If any of you are reading this, please send me specific ideas to save money on groceries. I could use the help.
Last week I bought 8 gallons of Milk, 8 loaves of Bread, 5 lbs. of Carrots, 7 lbs of Potatoes, 3 stalks of celery, 1 jar of peanut butter, 1 jar of jelly, 5 lbs of spinach, and 2 gallons of spaghetti sauce. I had $5 left, that we are saving, just in case we run out of milk or bread. We are still eating yummy food, but we are just getting sick of the same 5 veggies. We have also been supplementing all this yummy food with noodles, applesauce, sugar, berries, hamburger, and evaporated milk from storage and the freezer. Any Ideas on smarter purchases in this area?
Thanks for reading