It sounds like you are in a tough spot. The first thing I have to say, although I'm sure it's obvious: you are paying 45% of your take-home income on housing. Traditional (US) budgeting metrics would say it should be 30% or less. And of course, the bar is even lower here. But speaking practically, there is nothing you are going to be able to do around the edges to make up for this. Whether you need to downsize, relocate further out or find some kind of house hack to reduce that.
Having said that, here are a few other things:
Kid costs:
Piano lessons 150.00
Kid allowance 160.00
Kid's misc 200.00
hair cuts (kids) 30.00
Monthly: $540
Annual: $6,480
Is this essentially a carry-over from your expectations when you were married? You can't afford this, when you are trying to work out potential child support payments. (in the US, they could garnish your wage for unpaid child support. Is that a possibility?) I am sure it is or will be difficult for you and your children, but they need to understand things have changed. One way to pitch in is to adjust their expectations and demand less. It would be easy to understand a level of "parent guilt" this might generate, but maintaining the illusion of normalcy is risking big trouble.
You also joke about asking your 17-year-old to pay rent to help make ends meet. I would simply say they should pay more of their own way, and this should address the bulk of these costs; an 11- and 7-year-old shouldn't need a lot of allowance, or really the other things.
You say you have shared custody: is that really a 50/50 split, or something else? I would poke at the $500 food bill, but maybe not if he just has them some weekends. (some may poke at this in any case)
You also register monthly savings, but don't list any accounts in your assets. Do you have an emergency fund? If it is adequate, then you could shop your insurance around, and look at higher deductibles (covered by your emergency fund) for savings.
First let me say how much I appreciate you looking over this for me. The kindness of the people on this forum just blows me away. Thank-you so much.
I realize that I should have also added to my post, it's not my intention to retire early. I'm just looking to make my current lifestyle work. I'm already doing what I love job-wise, and would live the same way if I was retired.
Ok, the housing issue. I live in one of the most expensive regions on the planet for housing, the Westcoast of British Columbia (near Vancouver). So yes, sadly housing here is outrageous. It's common for most people to be paying 50% or more on housing, and I actually live in a rent-subsidized apartment complex that mandates rent is 10% lower than market value for low-income families.
Sadly, 3-bedroom apts run about $2100 a month here, and you aren't allowed to rent a place that's smaller for my family due to something here called "national occupancy standards". The law mandates that landlords can prevent you from living in a place smaller than what they think you need. So you aren't allowed to have more than two children share a bedroom, and I can't rent a 2-bedroom, for example, and just sleep in the living room either.
I know I could move, but my children's father lives here and we share custody so they stay at his place for half of each week. The commute to drive them back and forth twice a week, and have to attend different schools would be daunting to say the least. Also, without a drastic move to another city, I'm already paying lower rent than comparable places within an hour of my current location. And I live right across from my work.
The $150 for piano is actually for me and two of my children and we all really love it. It works out to $12.50 per person per lesson.
Child support: Yes you certainly can face severe consequences for unpaid child support here, but luckily I sat down with my ex last night and came to an agreement that we would wave child support payments for this year and review next year if the circumstances change. The reason why he made only $15,000 last year was due to going back to school. In the future he will make a comparable salary to me. He also has wealthy parents and is taking the kids to Africa for a month this summer and he owns his own home.
Given these circumstances, he agrees that I shouldn't have to pay this year, and the law allows us to make this change to our divorce settlement in our Province.
He also has agreed to take over the kids' haircuts for me, and to take over paying my oldest's allowance until he starts earning his own money (he graduates this month and then starts working full-time over the summer). I agree, he needs to take over his own cell phone bill as well, so that will save me some money too.
No, sadly my savings were wiped out this month due to paying two rents for May (I had to snap up the new apt before I lost out to someone else and didn't have time to give notice to my old place), and the damage deposit, deposits for the utilities etc. But now that I'll be having more wiggle room, I'm going to be able to start saving again.
The food budget is very high, but as I say I live in a HCOL area. I bought a 10kg bag of flour last week for $14 on sale!! Which feels crazy to me, but groceries on an island are very expensive. Also, that includes lunches for work and having my son's teenager friends over to the house too. In the future once my oldest is working I'm going to get him to chip in as well, so that will go down.
Thanks again!!