With the real estate market a befuddling mess, now might be a good time to buy a house. Prices are low and interest rates are reasonable.
While banks have become more choosy in approving mortgages, people can still get loans if they have good credit and cash saved up.
If the notion of having a nest egg seems laughable, consider the Community Service Foundation's household-budgeting seminars. They aren't the most exciting way to spend your evenings, admits executive director Jerry Spilatro, but they can be helpful to anyone saving for a house. Here are some tips and topics covered.
Track your expenses and cut out unnecessary items. Rent, car payments and grocery bills top most people's budgets, but what about less-obvious items that nibble away at your paycheck? How many people are on your birthday and gift-giving list every year? How often do you replace your eyeglasses? How much do you spend on lottery tickets, acrylic nails or HBO? "People forget about things they spend money on,'' Spilatro said.
Cut electricity costs. Focus on power-sucking items, such as air conditioning, the refrigerator, water heater and washer and dryer, rather than light bulbs, which use considerably less energy. Count how many things use electricity when you're not home — televisions, computers and night lights — and unplug those things you don't need. Set the water heater at about 120 degrees (any hotter wastes energy and can scald you). Use cold water to wash laundry and don't stand for too long in front of an open refrigerator. Lowering your thermostat by 1 degree can reduce your electric bill by an average of 8 percent, Spilatro said.
Pinch pennies at the grocery. Bring a shopping list to avoid impulse buying. Give generic products a chance and substitute expensive household cleaners for old-fashioned remedies, such as vinegar and bleach. Build meals around what's on sale.
Monitor your habits for a week. Jot down every time you stop at 7-Eleven for a doughnut and coffee or hit the office vending machine for a Coke. Small purchases add up after awhile. Instead make coffee at home and buy a 12-pack of soda to have at work.