I still don't quite understand how being in the red - for so much - every month is helping your situation. I mean, if you continue to be in the red, month after month ... you're spending money you don't have.
I lived the really frugal lifestyle for several years so that I could relax later on. I no longer live the insanely frugal lifestyle. But, this is because I have no debt and am partnered with someone who also has no debt.
So, we go out to eat. I do swaps - love those. I give to charities. We eat all organic. We go to the symphony, the movies, etc. And we do these things without ever worrying about being in the red or not having enough money for bills or savings.
However, like I said, I can do this NOW because I went through the frugal years in repaying my debt.
It's not like you'd be living the frugal lifestyle forever - just until you were debt free. It's SO worth it - truly.
I have to ask, though, what the heck kind of food are you eating?! It's the two of us as well, and we always eat organic, we live in a fairly expensive area, and we eat out around once a week. But, we're nowehere near $700.00 a month! I honestly don't know if I could eat $700.00 worth of food every month.
Is a lot of of that for wine? We don't drink so maybe that's where we're saving.
Anyway, there are other places you can cut back - eat out less often, set a budget of $5.00 a week for thrifting - this way you don't give it up. Do only one swap a month. Make your own laundry detergent (super easy and very economical). Feeding dogs the BARF diet is 1. cheaper, 2. healthier for the dogs. I have a GSD - am heavily involved in terms of rescue and (ethical) breeding. Any vet worth their salt will tell you the same thing - raw diet it best for carnivores. It will save you money too, as a high quality kibble is WAY more expensive than the raw meat your dog would eat. My dog shares my partner's meat, lol. Except, obviously, my dog eats his raw. Teeth cleaning will be a thing of the past - my dog has NEVER needed his teeth cleaned due to the raw bones he consumes. So, there's another way to take care of both health and finances in pets.
There are really many ways of cutting back without suffering. In my frugal years, to be honest, I never felt horrible. I didn't watch TV and didn't go shopping - so no temptations. I got really creative in terms of having fun without spending money.