keep living on 60K/year

put the extra into retirement, paying off the cars early, the mortgage depending on the interest rate on it (over 5% i'd chip away faster)

you can treat yourselves to a nice anniversary dinner & nicer vacation, but I would really focus on still living frugally so that you can put most of that extra income into future goals: retiring early, being debt free, something towards your child's future, ect...