Westchester Frugal, thank you for posting. Your case study and the comments have given us a lot to think about (two working parents, intense jobs, young kids, living in an expensive area), so I think that your post does achieve at least one of your goals. I am far from Mustachian but am actively trying to move toward a less expensive, simpler life. I have found that it is much easier not to take on a new expense than to cut an existing expense. It sounds like you have already come around to cutting/minimizing some of your smaller but still significant expenses, like the car. If you can keep that mindset, it should help you from taking on new expenses in the future, and, perhaps it will lead you to making some more drastic changes.
This comment is intended to be 100% constructive, not negative or judgmental in any way. I have read your postings and all of the comments. Please forgive me if I repeat or misunderstand anything.
So, starting with the little changes, first I'd cut the country club and trim the vacation budget. It is unfortunate that you spent so much time and energy getting into the club, but that is not a reason to continue spending so much money on it. Find the public tennis courts, pools, golf courses, and parks in your area. I'll bet they are nice. Host BBQ's at your home, the park, or the beach instead of socializing at the club. Perhaps try out not using the club for a month or two this summer to see how it goes before you drop your membership. On the vacation side, I'm not clear on whether your figure includes the cost of the hotels/flights that are paid by miles or not. Regardless, you can really trim this and still have a great time with your family. It will probably be less stressful to drive to the shore instead of flying to the Caribbean, too. I think you said you're already planning to do this, which is great.
Fully commit :) to getting rid of the fancy car, and buy something fuel efficient instead. As a side note - take a look at your gas spending - you're spending quite a bit for a family that lives 2 miles from groceries, 6-8 miles from school, commutes by train, and has one electric car. Where is the gas money going? We spend about half of that in CA and both commute by car (one of us 70 miles per day - so unmustachian!), but fuel efficient cars, so perhaps that explains it.
One poster mentioned that switching internet providers at this level is not useful. I humbly disagree. I think that scrutinizing all of your spending and making the small changes prepares you for making big changes and makes you think about big changes. You do want to make big changes at some point, even if it is 10 years from now, so it's a good idea to establish these habits now. So look at your utility bills. Can you cut your cell phone bills down, why are your gas/electric bills so high, does the lawn really need to be watered so often, etc? It won't save you tons of money in comparison to your income, but it is a good and pretty painless way to start building your frugal muscles.
Doing all that landscaping/maintenance yourself sounds exhausting and time consuming, but replacing a lot of the lawn with something low-maintenance is a great idea (at least for the house you're not planning to sell). It should cut your utility and maintenance bills, too. Perhaps you can cut down to a small lawn that you can mow yourself once a week (or your kids can do it) and native plants that need maintenance once a month for the rest of the area. I'd think this would even add value to your home, at least it would in CA.
Now, this is where we get into areas that are more difficult.
As far as live-in help, we have an au pair, which is actually a relatively inexpensive childcare option with two kids under the age of three in our particular situation/expensive area, so I'm not going to say live-in help is not wonderful, and it is worth the cost to us. I wonder if it's the best option for you, though. If your live-in help is an au pair, I'd consider moving to a babysitter for a few hours a day who can help drive the kids to activities if that is your primary childcare need now that your kids are older. Alternately, can you find a carpool for at least some of your needs? If your help is a live-in nanny who has been with your family forever and also helps with the elderly grandparent, that's a different story. In that case, I'd explore whether it would be possible for her to share time with another family while your kids are in school. You might find someone who is willing to drop their kids off at your house for her to care for so that she'd still be at home with the grandparent in case of emergency. That arrangement is very common where we live and would cut down on your expenses.
Next, your housing costs are a huge portion of your spending (even when I subtract out what I think are the costs associated with the rental property). Your landscaping, maintenance, and utilities are more than we pay on our mortgage, and we have a very unmustachian 4br single family home in a very expensive city with a very high mortgage. Purchased before I started reading this blog. :) I would seriously consider moving if I were you. I am. I know it sounds like a drastic step that is unnecessary when you can pay your mortgage every month and still save a lot of money, but when you sit down and do the math on how much money you can save by moving, it is eye-opening. There are tons of little costs that add up when you have such a big house - even down to replacing the batteries in the many, many smoke detectors that such a big house has, so include all the little stuff in your calculations. Start out by going to open houses just to look. Are there nearby suburbs on the same train line where the schools are not as good? You don't need excellent public schools if your kids are in private, and houses tend to be cheaper in areas where the schools are not as good. Do you find yourself thinking about how nice it would be not to worry about having huge grounds to keep up when you're looking at houses on the market? As you go to open houses, think about how your family would fit into them. Maybe you can find something with an in-law apartment above the garage or something similar that would allow your nanny and/or grandparent her/their own space but cut down on the size of your home. You could even rent it out once your kids leave home, so you don't have to move again when you retire.
I understand your reluctance to cut private school for your kids. It's difficult to justify doing something that is not strictly necessary and that you think could negatively impact them when you are making plenty of money. I do not come to the same conclusion that you do about the benefits of various schools and the impact on your kids of going to an excellent public school, but I understand you're not going to change your mind and won't push the issue. Could you cut down on the yearly gift to the school? My kids are young and will (hopefully) attend public school, so I do not understand the expectations or politics of these things, but perhaps there is some flexibility there.
Finally, I'd explore some of your assumptions in your retirement budget. I have not seen it, so these are just questions that came to mind in reading your post. Do you want to plan to stay in a house where your kids will have their own bedrooms to return to while they are in college and possibly a year or two after if they don't get a job or at least one that can pay for an apartment in Manhattan right away? Then you'll need at least 4 br's (assuming the grandparent continues to stay with you). Are you going to find a 4br house for $1M in Westchester? If you want to downsize and move to Florida, do you really want 4 br's or do you want something smaller? Will your time in your current house will be more like 15 years, not 10? If so, that puts transaction costs of moving in a different perspective. Do you want to continue to fund the same types of vacations for your kids - they probably won't be able to pay their own way starting out, and you'd probably like them to be able to come with you? For how long are you going to pay for them to come? Will you run out of miles to pay for flights/hotels on vacation if you're not working? What is the real cost of your vacations now (i.e., not using miles) and what do you expect it to be when you retire? For groceries and entertainment, how are you calculating those? I don't think you can just lop off half the budget because you'll have half as many people (or a third, depending on whether you keep live-in help).
I hope you find a path that works for you and your family. Best of luck!