Swizec posted the name of the guy who wrote the article I was thinking of, Ramit Sethi. Here's one where he talks a little about the issues with frugality: http://www.iwillteachyoutoberich.com/blog/save-on-coffee/
For most people, their biggest expenditure every month is housing, then followed by transportation.
If one wants to cut spending at all, the huge savings are made here. I.e. don't "consume" more housing than you need-- rent out extra bedrooms or get roommates if you have an apartment, don't drive an expensive auto when a cheaper one will suffice. The savings that can be made here-- hundreds in the case of transportation, possibly thousand+ in the case of housing-- far overshadow the amounts that can be saved by cutting back on coffee, etc.
For my family, in order (note, not CA): Health insurance, Mortgage, Food, Taxes, Day care. Transportation misses by a long shot, maybe a factor of 4 from taxes, and 2 from day care.
If I had to cut something, Day care is the easiest chunk, as it's not strictly necessary, but it's a sanity thing.
(This isn't quite accurate, since I haven't added in the company contribution to taxes, but I have to health insurance. Anyway. )