I think the fruit & veg budget is what has a big impact- you have to be careful about costs and see how much you can get. Cauliflower can be used as a flour substitute, though, just as a suggestion (not sure how it costs in 'bang for your buck' territory). In some places, you can use WIC at the farmer's market or even get special, separate, farmer's market coupons- ask about that. Farmer's markets can actually be cheaper than wal-mart and the like on certain foods, and they're much better quality.
I'm not sure if you're aware, but you should be able to get oatmeal as the cereal, if hot cereal might be a nice break. If you've got a blender/food processor, you can blend oatmeal down to flour. I think you can do the same with cold cereal as well, certain kinds can be ground down and used for something. Sorry that's not terribly articulate, but it may help you to get creative. You can google "cooking with cereal" for some suggestions. You may be able to wrangle up some sugar-free peanut butter cookies.
this is just a moment in time, step aside and let it happen