We have about £700-800/month left after all bills. This pays for anything car related, food, Christmas, clothes and every other small thing you can imagine. Our income is set to change though as I'm going to be setting up my own business which may take a while to get going, which means that initially our income would drop by about £400. Like you that concerns me, but we also have some savings to tide us over if needed.
As others say budgeting is key. Personally, I spread the cost across the year. Eg if I want to spend £500 on Christmas then I save £42/month. I do this with things like birthdays, car costs and school uniform too. Then there are some things clothes, hair cuts etc that I save for each month by putting money aside. All of this is tracked on a spreadsheet and goes into a separate bank account. So there's usually between £1-1.5k sitting in there but it cannot be spent unless it's on the spreadsheet and then gets taken off the total for that particular budget iyswim. If you're interested pm me and I'll send you my spreadsheet. I have found this method has literally saved our bacon. Otherwise I would have thought to myself that we had more money than we did and then would struggle with things like Christmas and birthdays.
I also put into a separate bank account the 2 council tax free months money and the child benefit/child tax credits from the 13th payment each year. So I only use 12 payments towards bills etc and the 13th is extra if you like. This year that money has pooled together and will pay for a caravan holiday. I also occasionally do surveys and mystery shopping. As I'm setting up a business I don't have much free time so I've not done much recently but if you put effort into both you could probably make about £100/month. But do consider making money from other things too. Do you have a skilled - cooking/sewing etc/car repairing etc? Is there something you can make a bit of money from in your spare time. A friend of mine set up a Facebook page and started selling really lovely handsewn things. She hasn't made her fortune but she makes a small amount each month which helps. Could you do dog walking/babysitting/cleaning to fit in when your DH is home?
The other thing we have done is take out a tesco credit card for everyday spending. We use it like our bank account but every time you spend £8 on it you get clubcard points and if it's at tesco you get double (I think). For example we have just renewed our home insurance and we got clubcard points for it. We pay our gas/electric bill and we get clubcard points...same for shopping at Aldi etc etc. I know someone who does the same but pays it off with their nectar credit card to get points on that one and then pays that one with an air miles card and then pays it off with cash. She gets lots of points but I don't have the time or the inclination to do that. I sit down once a week and I transfer the relevant amount to a separate bank account for paying it off at the end of the month. The money has to be there in the first place in order to be able to spend on it, that's the rule. Had it about a year now and it's working really well. It means that in the summer we'll get a free trip to a theme park and have also had a couple of free meals out. We also have a bank account with 6 free cinema tickets which pays for our date nights. Just couldn't do it otherwise. Always be on the ball for offers and deals.
For food our budget was £220/month but I've just upped it to £250 (family of 4) because we kept overspending. I can't seem to keep it down at the moment so I've cut money from other areas.
As someone else said it's about control. You have to be SO disciplined. Discipline and organisation. I totally get why you're worried though and those people who don't, probably don't understand that we all have different income, outgoings and circumstances.