Here are our expenses:
Mortgage : $800 (actually $755 but I pay a little extra.) Stop paying extra, you have other priorities now. Can you refinance to a lower rate?
Electric: $150-200 Seems high, think of ways to trim this.
Groceries: $400 Looks reasonable, but any way you can trim here helps. Even stuff like buying dried beans instead of canned adds up. Assuming you are able to trade time for money.
Gas: $300 Seems really really high if you work at the same place. I assume you commute to work together. If not - why not? If so - do you just work really far from home? Could you move closer to work?
YMCA Membership: $95
Car Insurance: $80
Life Insurance: $127
This leave about $400 a month left. We have -ZERO- Debt but I am not comfortable only having $400 leftover, especially considering we have a tax bill of $1200 coming due in April, which takes a chunk out of the emergency fund. Right now we have about 3 months of expenses covered. Don't tap the emergency fund for the tax bill. Use your $400/month extra for the next three months to pay the taxes. It gets you to the same place, but it's a mental switch away from using the emergency fund for non-emergencies.
I've cut everything I can think of. Should I consider a part time job at this point? With childcare in there I wonder if one of you should consider staying home, maybe looking for a home-based business that will still bring in income. This is easier said than done of course, but it can be done. We're stretched as thin as I can think. We don't even have cell phones, we have ipod touches and use those to make phone calls. And the YMCA membership isn't negotiable, that is paying dividends via we are losing significant amounts of weight (I was 300 pounds when we started.) This is great, but is a cheaper gym an option? Or walking/running/biking outside?
To be honest, I feel you are in OK shape. After all your expenses and savings you have $700 per month left over (that is including the $3400 in "3rd paychecks") - $8400 per year. You have an emergency fund and no debt. Take a step back and breathe, because you are in better shape than a lot of people with double, triple your income.
At this point, maybe you should be thinking about big lifestyle adjustments rather than small frugality measures (though those certainly don't hurt). Moving closer to work, maybe to a house that would allow you to rent out a basement apartment or in-law unit to help with the mortgage. Downsizing to one car. Looking for better work, additional work, and/or at-home work.