In the Atlanta area for example, there are plenty of nice 2-3 bedroom houses for $200,000 or even less, which puts your mortgage at $1,000 / mo. That leaves $1,500 / mo for a car, utilities, and food, which is plenty doable. Rent out a room if you want to for more income.
It's hard to figure how much to save for kids college, because the spectrum is so wide. For example, do you plan for the worst case scenario (ivy league, no scholarship or out of state state school, no scholarship) -- $250k and climbing.
Or the best case scenario (they take tons of ap courses and courses at local cc until transferring their jr year to in state school with full tuition scholarship) -- ~$20k?
Maybe try to aim for the midpoint? It's a hard problem.
What I've read that mad sense to me, though, is that kids can borrow for college and you can't borrow for retirement (reverse mortgage notwithstanding).
That would change the employment calculus for a ton of people.