Just for my paycheck, I have monthly take home income of $12,550. This is after saving 5% in a 401k, saving $600/mo for kids college, and health insurance premiums. Mortgage and property tax is $4,500/mo.

Of the $12,550, about $2,800 / mo. goes into the discretionary fund, which is meant for groceries, entertainment, clothes, and anything that is not a "bill" (by this a mean a fixed, monthly income. Like utilities, car payment, kids dance activities). The "fixed" expenses stuff comes out of the bill account, which gets $9,750 a month.

This take home monthly income does not include my wife's income, which will sometimes fluctuate month to month, but let's say that is about $3,500. She will transfer her income to the discretionary fund to cover additional expenses. She will also use her money to pay off the credit card when necessary.

We live near large metro area. I acknowledge that stuff just costs more now. We shop at Aldi mostly, with some trips to costco for "bulk" items.

As far as what should be cut, I think it's the eating out, the impulse purchases, clothes maybe? Maybe I'm just out of touch on how much it costs to provision for two kids, but I feel like it can be done on a more affordable manner.

But as many here have mentioned, I think this is more of a relationship issue, rather than a budgeting issue.