You are in a
HAIR ON FIRE emergency. Simply put, you (as a family) are living FAR above your means. You came asking to find $1000 for monthly daycare, but - you are not paying down existing credit DEBT and you are not saving anything toward emergency savings (let alone retirement). $1000 would not even last the amount of time to get another job, and get your first paycheck. You are spending more than you make.
By
choosing to do this, the current you are sacrificing financial stability, clean credit history, home ownership, and retirement from the future you. And for what? "A lot of high end baby clothes, organic treats, 4-5lbs of grass-fed beef a week(!)"?
As a family, you need to draw up a financial plan. Where do you want to be in 1 yr? 5 yrs? 25 yrs? More kids, pay for college, SAHM? Career plans, retire at ...? Medical insurance is very important in your situation; if you were not able to work does your wife's career path have medical ins to cover you?
The good news is that (for now) you bring in enough income to completely turn this situation around by acknowledging YOU CANNOT AFFORD THIS LIFESTYLE.
Groceries: 1200 - This is INSANE for 2 people. Cut all prepackaged, convenience food. Buy truly "whole foods" (raw fruits, veggies) and prepare them yourself - no bags of "baby carrots" - just buy a bunch of organic carrots and peel them. Make meals in bulk, use your freezer (are you throwing food away?) and only buy what is in season (
http://www.sustainabletable.org/seasonalfoodguide/). Forget Whole Foods - you can't afford it. Shop Aldi, Trader Joe's. Beef is not the only protein around; chicken, pork, fish, legumes, eggs provide variety - which is healthier than eating the same diet every day anyway (no matter what grass those cows are eating). "Organic treats" - this is all marketing! Sugar and salt is sugar and salt no matter what the label says. It's really just a fancy version of McD junk.
Budget $550health: 105 - What is this? If it's vitamins, shampoo,etc - buy in bulk, buy online - holy cow what are you spending that much $ a month on, separate from grocery AND Medical?
Budget $25household item: 156 - Cleaning supplies & toilet paper should never cost that much. Use vinegar and plain bleach (not together). Old tshirts are rags. No other items for your household.
Budget $40entertainment: 160 +
eating out: 55 - Find outdoor concerts, free activities at the library, exercise together by walking/jogging with the baby. Have friends over. One date night a month. No more eating out because you didn't have something ready at home or from the freezer. *See Groceries*.
Budget $75misc: 200 - Use a budget app to track everything for both of you. YNAB
Budget $0car: 299 - How much is it worth? Can you sell it?
cell phone: 130 - Others have mentioned less expensive plans
Budget $50gifts: 125 - You can't afford pricey gifts for yourselves or others right now, and the good news is your baby doesn't care. Ask yourself why you feel compelled to do it anyway.
Budget $25baby: 300 - Babies don't cost this much. Until you have financial stability, diapers ONLY. Ask for baby clothes & toys for Christmas, birthdays. Shop 2nd hand stores like Once Upon a Child (some outfits will be new with tags!) Sell your fancy baby clothes and gear on FB sites to recoup some of the cost when outgrown.
Budget $125Potential savings: ~$1500$1000 goes to daycare. $500 goes immediately to emergency fund until you have 6 months living expenses. Then start funding retirement, credit debt, etc based on your financial plan above.
This probably all sounds drastic, but it's really a shift in mindset. Instead of thinking "this $ is what I need/want", it's thinking "this is the BUDGET I need to fit our life plan; what can I fit in that bucket". Choose your life plan, choose freedom & stability.