Great responses so far..
I think that the mixing of business and personal likely means that you are not claiming everything you can as a tax deduction before income on your business. Clear separation is the way to go. Consider not using work resources for personal use, too.
I would get the expensive phone and one car dedicated for business use only, and track any minor personal use, to get the best deduction... then, sharing one car for personal use, you can aggressively review what your cheapest soln is. One phone for personal should look no more than $42, for full text, talk, web wifi here... other MMM say it is under$20 for USA.
Note, you will only need one phone between you, as you have the work one for emergency use. I dont have a cellphone, and keep the home phone, because I want to call my kids at home, who dont have cellphones, so need emergency phone at home, and I carry a work phone when at work. So I understand that keeping a home phone is needed.needed sometimes.
Like the others, I am a little surprised at your food and gas use.. hoping that you drive a ton for work.... and $600+ for car payments is what made me vow to never have car payments again. It is such a sucking hole of money extraction from your budget. Can you hear the wind as the money flies out through the car?
If you separate expenses, then your business may not be making $40k anymore, and you can evaluate what activites are bringi g in the most nert profit, and work to get your business income up. Eg. Long distance driving for client should pay for travel costs. Some clients will need to be cut or asked for more $d$.. you may even decide to reduce time at that business and add time to paid employment, if your business is one that requires a longterm build up of recognition, like some sales, consulting, service, art, writing businesses.
Good luck! The great news is that you are not far off. If you can get on top of the car expenses, in one year, you will wonder why you were ever worried.
Unless your utilities are crazy high, you living arrangement is awesome! Too bad it is funding a car habit. :-)