I’m wondering … have you calculated how much it costs you to work? How much does your employment contribute to the taxes you pay? If you didn’t work, would you still be in need of childcare? (I ask because, with your spouse working from home, you might have to have a quieter environment than 3 young kids will provide, especially in a small house). BTW, childcare doesn’t completely disappear once kids are in school. There are lots of days when kids aren’t in school and those breaks and summer can be very expensive.

I ask these questions because, if I were in your situation, I’d lean toward working less, not more. I wouldn’t take the OT given the bonus package. I’d lean toward straight salary plus profit sharing. That way, if you work less than 40-hours but get your job done, it doesn’t matter to your cash flow. You can take your reduced stress level and put that toward household money management and quality of life issues.

As for the house, keep in mind I’ve raised 5 kids to adulthood, your 3 bd, 1.5 ba, 1700 sq ft is fine until the kids are around age 12. Before then, I’d predict you might move to a more suitable house rather than remodel.

So, priorities:

• Emergency fund. Aim for 6 months of regular monthly expenses (including daycare).

• Debt pay-off except the mortgage. Reduce unnecessary expenses.

• Save for another used vehicle.

• Fund retirement.

• Aim to have one stay-at-home parent by the time the oldest child is 12. At that point, childcare ends and the middle school / teenagers truly need their parents around. If you can only choose one time in childhood when you don’t work, the time between 12 and 18 is the most critical.