Save the evidence of the affair–text messages, etc. Infidelity is a good reason for divorce, and if you can prove it in court, you’re on much better footing.
It seems pretty clear that she has you wound around her little finger and can do what she wants. You have two options–let her do what she wants, or walk away. Keep in mind that your kids might be harmed more by a toxic adulterous marriage than a clean divorce.
The courts don’t care about the affair or infidelity if it’s a no fault state. The reason you are breaking up does not matter. There could have been serial affairs documented with text messages, video, notarized with multiple witnesses. It doesn’t matter.
Most states in the US, like California-- don’t care about the living arrangements of an ex-spouse, whether they’re living with someone and having sex whether it’s heterosexual or homosexual is irrelavant to the court. The court doesn’t care, this wouldn’t affect custody in California---- THIS IS WHY YOU NEED TO GET A LAWYER AND NOT LISTEN TO FOLKS ON THE INTERNET ABOUT LEGAL ISSUES—even those of us who have been through the separation/divorce grinder. Some jurisdictions will allow a codicil in a divorce agreement with a ‘morals’ clause regarding the kids-- i.e. no custody if they’re living with someone, or having someone spend the night-- some jurisdictions won’t allow them, or won’t honor them even if they are in the agreement. Again-- lawyers not internet advisers for this kind of thing.
If your goal is trying to keep your marriage together, than it is solid advice to avoid actions which will seen to be petty or vindictive as they are not likely to achieve the goal of reconciliation. If your goal is reconciliaiton, you need to act like the man she married but you must insist on respect-- which is completely lacking in the current situation.
You’ve received very good advice contradicting mine regarding the phone. I tend to believe it wouldn’t count against you since you’ve done nothing to prohibit or interefere with her running around and meeting this woman. You’re continuing to support her education. You haven’t been monitoring her phone or communications, you’re simply stating it will no longer be paid for out of community funds. I see the funds she’s expending on this affair as coming from the family. Every cent is coming from money that could be used for things you need or would like to provide for your kids.
Of course, as many of my compatriots found out-- if the other party expends all the community funds on their own partying-- the court may not really care. I know many men whose wives emptied the accounts, ran up the bills, moved in with someone and the husband was still expected to pay all the bills. The wife claiming she’d spent it all…
Courts, again lawyer, do tend to take into account if one party appears to have been concealing assets.
Which is why I think separation is a logical way to go, with you keeping custody and taking care of the kids. She becomes responsible for her own bills out of whatever stipend she gets vice it coming from the kids money. That arrangement for the separation being covered by a legal agreement you create via a lawyer or mediator which specifically declares the date that you are no longer responsible for each other’s debts, and provides a guarantee of her access to the kids so you can’t pull a fast one/vindictive move with custody.