Keeping financial stress at bay

1. Do face the numbers, open all bills, sort and shred and pay whatever you can afford to. My family went through an extremely tough couple of years of underemployment and only had bill collectors call a couple of times. It was all because of the $5 payment and the $20 grocery shop. Make regular payments whenever you can. (even every few days, deposit found money -- odd jobs, bottle depot money, consignment store money, garage sale profits) Even with $25 you can pay $5 on 5 bills. You may find this pointless but if you don't pay the little amounts because you can't pay the big amounts, the $25 will get spent on something else instead and your financial stress will go up.
2. Once you've paid what you can, setting aside something to stock the pantry with, put the bills aside, somewhere safe and out of the way, and plot out how you are going to spend the next pay period without much money. (meeting friends at the park with the kids, doing something creative, exercising, baking to stock the cupboard, hosting a potluck dinner, etc...)
3. Having a stocked cupboard (or even the illusion of it) will reduce the frantic feeling of "making it work" on little funds. Take all items out and wipe out the cupboard. Inventory what you have and check on recipe sites like www.epicurious.com what you can make with it. (don't be afraid to improvise) Don't worry about the kids not eating it and going hungry. Whining will not kill them. If they are truly hungry, they will eat it. When you restock the kitchen, do it with healthy "boring" non-instant foods. Your cupboards will stay full longer and everyone will be eating better.