Might be able to give you a better reply if you break the costs down more. ie, individual costs for your mortgage, food, fuel, dog groomer, etc.

For our family of 5 we generally have:
Mortgage #1 (OUR house) - $1000 p/f
Car (including fuel, servicing etc - salary packaged) - $300-400 p/f (not sure of exact amount as some of that is paid 'pre-tax', some post-tax).
Food (including nappies, dog food for two dogs, cat food for two cats, kitty litter, etc) - $300-400 p/f
Electricity - $30-40p/f (have solar hot water, so this may be different to what others spend)
Gas - $10 p/f
Mobile (only have one, and no home phone, never exceed plan) - $35 p/m - approx $17.50 p/f
Internet (prepaid wireless) - $130 p/a - approx $5p/f
Motorbike (including rego, fuel, servicing, etc) - $20 p/f

So approx $2000 p/f or $4000 per month.
Obviously if you have a bigger mortgage, or more vehicles, etc your figure will be different.

[Note: I didn't include Mortgage #2 or the investment costs, because they didn't seem relevant to your question, but they are extra costs we also have]

If you have all the individuals items budgeted - the next step is to go through them and figure out which are needs and which are wants. Sometimes this is obvious: Food - need. Foxtel - want. Othertimes not so much: is the second car a need or a want??? (It is OK to have wants, just be honest about what they are).

Once you have figured out your needs and wants go through them and see where you can and cann't or aren't willing to cut costs. Ie, food is a need, but do you really need hienz tomatoe sauce?? (I do ). Is the dog groomer a need or a want? Do you need to spend that much every month or could it be scaled back to every other month or you do it yourself?
There are no right or wrong answers to this - but if you are trying to save money somewhere, that means cutting back or forgoing some of the things you usually have.