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With both parents working, they have the kids in some kind of daycare and often daycare for 4 year olds just calls itself "preschool" so without more info it's hard to know much about whether that's reasonable or not. I did think it interesting that their lifestyle fully consumes all their income (and maybe plus a little bit) so that when her income dropped they turned to spending down equity. Also, given her line of work she might have anticipated that house prices could be falling. In any event they appear to be living paycheck to paycheck so any employment change puts them in financial danger, yet still live in a half a million dollar house, fully fully mortgaged. They don't seem like helpless victims of their plight, but more like avid consumers who prefer not to LBYM and instead leveraged to the max. If things don't go well, there is a downside to that plan.
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