So I ran through the calculations last night and it looks like I make $5.07/hour for my 10 hour days. Yikes. I really enjoy my career and I think in the long term, for retirement, career advancement and given the lessening childcare costs due to public schooling in a few short years, its worth it to continue working.
Salaries seem on the low side for software engineers. Are you open to moving to another part of the country? Might be able to find a better overall situation in a place like Austin, Portland or even Seattle (high overall cost of living but would have better salaries and probably could lose the crazy commute).
Stop buying the lattes. Bad/expensive habit that probably is also messing with your sleep at night.
Any chance either of you could flex your hours a bit to try to reduce the amount of time your kids are in (and you are paying for) childcare? Or find a childcare place closer to one workplace (kids in the car longer, but you aren't paying for care for that time)? If your kids are like mine were at that age they would probably sleep in the car most of ride anyway.
The whole reason we live here is because that's where my family lives. Me and my siblings, parents, aunts, uncles, nieces, nephews, grandparents ... all 60 of us live in the same town. So it'll be hard to move to a different state. Different city? fine, state ... I'd need to do some soul searching for that choice.
I'll stop the lattes :) I promise. I even brought a mug from home to work so I can make a cup of tea before I leave.
We have a bit of flexibility with work (my husband more so and does work from home once or twice a month). I managed to talk my boss into letting me work from home whenever it looks like we are getting more then 2 inches of snow. I'm hoping if this arrangement works out I can slowly ask for more and more time working from home.
I don't think you're far off from having more options, but I don't know that moving and renting makes sense right now with savings almost entirely being eaten up by a move. However, from just the phone/internet/latte reduction of let's say $185/month, that's $1550 you have per month to save.
In ~9 months, you'll have 21K in savings. If you could actually sell bringing 16K or less to the table, you could get out of it and still have 5K for moving. If selling isn't realistic, you have the option to rent while having a cushion that I think a responsible landlord needs. Even if you had a vacancy, you would be able to cover it based on your monthly cash flow at this time (1550 + 100 from escrow reduction + gas reduction compared to "current" budget + if it was vacant with low commutes you'd have more time to work on being frugal in variable costs) - though it isn't what you would want to do with your "extra" money each month, knowing you can carry the costs would hopefully help you reduce the rental risk by being able to be more selective about your potential tenants.
To me, it sounds like you gain quite a lot of enjoyment from your job. Given that you have enough stress in your current situation, I think I'd tread carefully about jumping to a new job that is only a lateral move financially. Even if it was in the same area as your husband's job, would you realistically both have the same super reliable hours to get back in time for the daycare pickup? Next year if you sell and move, the crushing commute may lead you to need to quit for sanity until you find something new, but hopefully you can find something without quitting or rebuild savings before needing to make that decision (if demolished from the sale).
This advice really resonated with me. As much as I'd love to snap my finger and move/sell right now. It would be prudent to save up a cushion that leaves us open to options. 20K doesn't seem unattainable. Finding a new job would be incredibly stressful at this point. I'm willing to do it, if its the right choice. But maybe saving up as much as possible over the winter and early spring and then trying to sell in the late spring is a better strategy. And if it doesn't sell, as you said, we'd have a cushion and can rent to the best tenants we can find.
I think you have some really great suggestions about career and moving ideas. I think the previous suggestion from lhamo about moving both of you to a different state for higher income could be good. Your daycare cost seems really high. You could hire a nanny or even better and Au Pair for less. Here is a breakdown of Au Pair costs: http://www.aupairinamerica.com/fees/ It would be $361 per week and you would save some time not having to drop off at daycare. This would also be awesome if you could work out of the home once a week or so.
I've never looked into a nanny or an AuPair, I never thought we could afford it. I'll look into it.
So my current to do list:Stop the lattes
Cut the cable ($65/m) and cell phone ($180/m) down as much as possible
Continue saving (aim for $1500/m)
Research selling a condo (maybe a for sale by owner? would that save me money?)
Research nanny/au pair
Research telecommuting jobs and/or jobs near where my husband works
Talk with husband about maybe moving to a bigger tech hub
Start cleaning out condo and selling what we can to increase savings.
