My wife and I have one infant, and want another. I make around 117k/year pre-tax. Rent for a 3 bedroom townhome is 2500/month, that's roughly half my monthly take-home pay. Everything else comes out of the other half.
I contribute enough to my 401k to get my employer match, but no more. I'm putting $250/month into my daughter's 529 based on similar calculations for what a decent 4 year degree will cost (a little north of a 100k). I max out our HSA to make the high deductible health plan worth it. We don't eat out that much. I drive a 23 year old hand-me-down Toyota. Things still add up fast if we don't keep track. There's not much left over at the end of the month. And there's going to be another $250+/month when the other kid comes along.
We're not living in poverty by any stretch, have no debt, and can afford some minor luxuries. But it's a lot tighter than it was for my dad working essentially the same job at the same age. I'm curious as to the levels of credit card debt in your moderate income neighborhood, and how prepared they're going to be for retirement at their current savings rates. Or perhaps they just don't expect to pay for their kids' college at all, and are just hoping they don't get sick.
We've already sacrificed the vacations and expensive restaurants. Should we sacrifice our HSA and kids' college funds as well so we can have 3 instead of 2?