What's the point of my grocery budget?

I have a budget of $300 a month to cover all food, animal food/litter, baby diapers/wipes, and household stuff (cleaners, garbage bags, etc). I actually thought I was doing a fantastic job keeping within my budget until I started tracking all our expenses on www.mint.com. As I watched over the first few months I realized I was actually doing horrible! Starting May 27th I'm going to start keeping a written record here of what I spent and what meals I made for each week for the next month. I'm hoping this will show me where I'm failing at so I can fix the gap. Since my budget is supposed to cover all household stuff, 2 adults, a baby (who eats like a toddler), 2 cats, and 1 German Shepherd I have considered if I needed to raise it to $350, but I really really really don't want to.I know I can do this! (In my mind I'm thinking of the Little Engine that could "I think I can. I think I can. I think I can")

One of my favorite blogs is www.moneysavingmom.com. This lady is awesome and inspiring to me! She posted this deal: here and after printing my coupons Little Dude and I went shopping today. Regularly $8.99 a package * 2=$17.98. Minus sale price, store coupon ($2.00 each) and MQ coupon ($2.00 each) they come to $2.99 each * 2= $5.98(before tax). That's a huge savings!!

After tax I spent $6.68 cents. The cheapest the commissary had was $6.00 when I bought a package last week and used my $1.50 coupon from a Sunday paper (I didn't keep track of which one). That package is going back and I'll put my returning $4.50 back in my budget. Yes, you read the picture correctly and saw that I purchased a medium and large package. I don't know how often I'll actually get to a pool or beach this year so I got a package for next year. I figure is all else fails I can return the large for another medium for this year.