Dan, it looks like you are on the right track in a lot of ways as far as your accounts and savings are going now; the big area for improvement is your monthly expenses. Here's my item-by-item take on the most egregious offenders:
car ins: 100
$1200/year to insure two 10 year old sedans, one of which is barely driven? Do you have comprehensive coverage and no low-mile exemption, or do you regularly hit old women in crosswalks on the way to the grocery store? You could save some by shopping around the coverage you have to other insurers, and even more by dropping your coverage down to liability.
internet+homephone: 75
We pay $25/month for 3/1 internet and it's usually fast enough for four people to share it, including streaming video and online gaming. You could probably cut at least $40 out of this category. Cell phones do not cause cancer, for the record.
cell phone: 90 (smartphone--it's complicated)
It's dead simple, switch your smartphones to an MVNO. You can cut $60 a month out of this category.
Groceries: 425
Where do you shop at? Even if you insist on living on only lobster and organic raspberries, you can get them much cheaper at a grocery store than a health food store, and cheaper still at a shopper's club. Buying your staples in bulk, even if they're organic quinoa and brown rice, can save you a ton over what you're paying now. So can substituting more eggs, nuts, whey protein, beans, lentils, tofu, TVP, and friends for a little of your meat consumption -- we are meatless here only a night or two per week, but it helps us afford steak, shrimp, and salmon on the nights we do eat and keep spending at a reasonable level.
Eating out: 250
You could save $3,000 a year by cooking things yourself, enough to annually buy and then throw away a nicer car than you're currently driving. Is it
really worth the life energy you're putting into your jobs in order to earn the money that you spend eating out? If you really enjoy it, I bet you'll really enjoy it more if it becomes a twice-monthly treat than a twice-a-week thoughtless habit.
Baby sitting (to allow wife to work): 300
This is more than a third your wife's gross pay, and I suspect it's more than half after taxes. I know that working part-time is not solely an economic decision, but your wife's part time work may cost you two more than it makes you after you consider this babysitting, house cleaning, eating out more often, gas, wear and tear on her car....
House cleaning: 130
I won't repeat the well-deserved facepunch you've already gotten here. Having a clean house is nice, but it's also easy. Just learn to live with only the level of cleaning you provide for your house, and you'll stop leaking four dollars a day to laziness.
Donations: 130
Donations are good. If you want to reduce this and still make a difference, consider giving your time instead of your money by volunteering for causes you care about. We've got people on the forums who work with groups like Doctors Without Borders, but it can be something much simpler like walking dogs at the local humane society, or spending the day cleaning up a park or visiting a public school classroom and reading.
Allowances/mad money: 400 (200 for each of us)
You each spend $200 beyond the date nights, eating out, babysitting, house cleaning, delicious high-quality food you feed yourselves, smartphones, high speed internet, and $350 of "other"? I think you could do a lot better than this--perhaps you could keep the category the same size but each pay for all your meals out, data plan, and your date night babysitting out of your $200.
Other purchases: 350 (household, baby stuff, travel other than airline)
$350 falling through the cracks each month is going to add up pretty fast. Have you tried a cash envelope system or an online tracking program like Mint to find and plug the leaks?
If you make most of these tweaks -- most of which are painless even in the short term, and all of which will be painless within a year -- you'll save $1200 a month, which is $360,000 of 'stache that you don't have to accumulate. If that's not exciting, I don't know what is.