5. Consider alternatives. Five years may be too long to wait or $64,000 may not buy Dori's dream house. If the numbers just don't add up, explore less traditional paths to home ownership. A relative may be willing to invest in your home through a "shared-equity" arrangement. In some communities, two or three families have bought a large home together, divvying up child care and household chores.
Before you plunk down the down payment, make sure the rest of your financial picture is sound. Inspect your safety net: do you have term life insurance, and a will naming a guardian for your children?
Take advantage of tax breaks. Filing as head of household, claiming child-care expenses and the $500 tax credit for each child under 17 can shave hundreds of dollars off your federal tax bill. Dori's income should make her eligible for an $850 earned income credit -- one of the few times the IRS pays you.
Finally, don't neglect your own retirement fund. It may sound selfish to fund your own future first, but remember that houses and a college education can be obtained with loans or other assistance. There's no such thing as a scholarship for retirement.