Like others, I've been keeping spending diaries all my life: I started when I was 8 and first got some pocket money (which I had to save all year long to buy Xmas presents for my relatives, I was hardly ever allowed to buy myself books or even postcards!).
Besides helping you to budget (e.g. if I've spent more than £100 on food in 1 month, I try to recoup it the next month) it also helps you to spot which prices are going up - or down, i.e. it can help you spot bargains as well!
Compared to 1 year ago, the prices of bread, tea, and coffee has gone up by 20% to 30% at my local supermarkets. I've tried to shop around, but it's everywhere the same. I was already using BOGOF and buying in bulk, so there's really no way I can save money - except by eating less bread and drinking less tea/coffee. Fruit and vegs have gone up as well.
I hardly ever manage to save anything and I had to take a credit card last November (which I pay in full every month), as some months the money was so tight, e.g. I could not afford to buy fresh food after the 15th of the month, and if I missed the shuttle to work, I could not afford the bus fare (£2.50 to £2.65 depending on the line) and had to walk 1 hour to work - and arrive 20' late.
Right now I'm applying for better paid jobs: it looks like the only way out for me is to give myself a payrise - by moving company.
I also budget in advance every month, including for big expenses such as new shoes or a fan (getting real hot where I am).