I cut waaaay down on my groceries by just cutting out snacks. Now, I make soft pretzels and we always have apples and pears around if the kids get munchy in between meals. Little kids do well with 5 small meals a day instead of 3 bigger ones. We used to have little "snack trays" already made up with chunks of cheese, apples, peanut butter on crackers, and raisins. They were all healthy snacks and the peanut butter and cheese had staying power versus the higher carb packaged snacks (which are very expensive, anyway). My kids seem to be surviving fine without the snacks and it really cut down on the grocery bill.
I can see why keeping the washer and dryer is a good idea, especially since they are almost paid off. Keep an eye on Freecycle for a fridge, you may luck out. I gave away a pretty nice one a few years ago through freecycle.
My sister ended up opening a checking account just for her husband. He has a certain amount of coffee money in it, and that's all. He kept overdrawing their checking account and it was driving her crazy. With separate accounts she always knows where the main household one stands. She took away his debit card to the main checking account. He's a great guy, but horrible with money.
I think that at this point surviving through the recession is the best that many can expect. It looks like my cousin and her husband may be moving in with us at some point in the next few months. They have a few options, so I'm not sure what they will decide. They have been unemployed for 2 years in a high unemployment area (a few hours away from us) and their benefits have run out. Sometimes people who don't live in those areas don't understand just how challenging it is to find employment. There are some things that are out of our control, and we can just do the best we can.