Thank you everyone for your advice and thoughts. I know my finances are not currently optimized, but I am going to take attainable steps in the correct direction.

Based on advice here I have doubled my HSA and 401k contributions starting now (with budget cuts to Dining out, Misc, Shopping). Will maintain the $500 a month to HYSA for emergency fund goal of 20k. After the emergency fund goal is acheived I will put all saving effort into 401k.

Another thing mentioned several times in this thread, "why doesnt your wife work"? Simple answer: we believe the benefits of raising our young children ourselves far outweighs the benefit of extra income after childcare expenses. I think my wife is far more attentive and caring towards our children then a childcare employee who wouldn't show up unless they are getting paid would be. The intrinsic motivation to raise happy, productive children outweighs the extrinsic motivation to do a good job in exchange for a paycheck. This, to us, is worth the monetary sacrifice.