How do we do it?

Living on one paycheck is really hard. I would say the biggest thing that helps us is our ability to be frugal. We cloth diaper and breastfeed instead of buying disposable and formula. That alone has saved us thousands of dollars. I make our laundry and dishwasher soaps, and we find fun things to do for free. We don't have central air, but instead use fans and have one AC unit in our children's room in case it gets really hot.
So what kind of fun things are free these days? I have to be crazy, right? Well, our location does help. We're minutes from the beach and less than half an hour from a free zoo (which also has story time and other free activities.) We also have two parks within walking distance, my parents bought the kids a swing set, and fishing along the river in town is free. Still, there are other free things that you can do no matter where you are.
When is the last time you took your kids to the library? Our library has a wonderful selection of books and movies we can bring home. As long as we take things back by the time they're due, it's free. Even cooler, our library also has fun, free activities that I wouldn't know about if we didn't visit. For example, the other week we took the girls down to color on the sidewalk outside the library. Later this month there will be a reptile presentation, a magician, and something called 'Signs Under the Sea.' The kids really enjoy it, and it creates a great learning and social time. Sadly, many libraries are seeing huge budget cuts, and may not be around much longer if we don't visit and support them.
There are also many groups in almost every area that are based around children. We have a local 'parents' group, which is pretty much play dates for children and a great time for parents to get some adult time. We also have a baby wearing/ breastfeeding support/ play date group. You may have to do a bit of online searching, but there's a good chance you'll have them near you if you look.
No kids, or still need more ideas? Check your local freecycle group. You wouldn't believe the things people are giving away! A while back, my husband expressed an interest in learning to play the piano, but due to tight finances, it would be really hard to get him anything beyond a cheap, used keyboard. A very short time later, I stumbled across two full-size pianos a church was giving away. We brought one home, and while it drives me nuts, my husband and girls get a great amount of use out of it. We have also gotten toys, a huge fish tank, a spice cabinet, maternity clothes, and a full wardrobe for my oldest daughter among many other wonderful things. Just don't forget to give back to keep the group going.
We also have a couple of state parks near us. You'd be surprised how many state parks there actually are. They're great places for picnics and hiking. Many also have parks. Just be sure to check for harmful insects like ticks when you're done hiking. They seem like pretty harmless little critters, but we almost lost our oldest daughter to a tick born illness. You'll also want to keep an eye out for annoying plants like poison ivy, though a bit of calamine lotion will go a long way to help with that. You can follow that link to get some online, or grab some at Wal-Mart, Dollar General, or other just about any other store.
I've touched on a few fun, free things we've found to do. What about everybody else? I know we're always looking for something new and exciting to do!