For under $2500 you can rent a nice house in Penasquitos – Poway Unified School district – with 4 bdr and yard. There are condos with 3 bdr in Penasquitos that rent for well under $2000 a month (but with just a small patio, and sometimes no garage). Same in Scripps Ranch, though I haven’t looked as extensively.

Don’t feel terrible if you can’t manage to save 2K a month at 140K. Most people won’t be able to. It’s very hard to budget like that with 2 young kids, especially if they are in daycare and go to activities and all that, especially if both of you work. I find it very hard even at larger income than yours and I can manage it only by turning down the retirements savings and college savings. It depends what kind of life you are happy with.