(NEW YORK) -- Despite the real estate meltdown, consumers are still being advised to buy a house as soon as possible.
Buying a house is still the only investment you can make with money you have to spend, anyway -- your monthly housing payment. You can't buy stocks with your rent money, but you can buy a home.
It's especially a great way to save money if you plan to live in the house for at least five years; buy a house within your means and not stretch for a fancier one; and save up at least an old-fashioned 20 percent down payment.
To save up for a 20 percent down payment, you'll need to make some changes to save big. Here are some ways to pile up savings:
-- Negotiate your rent. Assuming you are renting now while you save up for your first home, approach your landlord and threaten to leave unless you get a reduced rate. If you're a good tenant, they'll likely comply.
-- Never buy a new car. Cars depreciate an average of 45 percent in the first three years. So buy a three-year-old vehicle and you will save 45 percent.
-- Shop around for car insurance. The same coverage at another company could be hundreds or thousands less. While you're at it, consider raising your deductible and canceling collision and comprehensive coverage if you have an older car that is not worth repairing if you wreck it.
-- Become a creative couponer. Fiendishly match up store sales with manufacturer coupons and you can save as much as 80 percent on groceries. Also, if you currently shop once a week, cut out one out of every four trips to save 25 percent.
-- Set a spousal spending limit. Resolve that you and your spouse will not spend more than X dollars without each other's permission. This does wonders to prevent pricey impulse buys.
-- Cancel cable. The average American household pays more than $700 a year for it! Check out the website www.cancelcable.com for ideas to see all your favorite shows without cable.
-- Right-size your cell phone plan. Use the tremendous tools at www.myvalidas.com to see if you are paying too much for cellular service. You upload your bill and the website tells you if you should switch plans or even carriers.
-- Switch to a high-deductible health plan. This is great advice if you are healthy. You can save several hundreds each year, almost enough to cover the new, higher deductible itself should something go wrong.
-- Check out first-time homebuyer assistance programs. They are offered in most every state and maybe you won't have to save up such a big down payment after all. Some of these programs help with your down payment, others snag you a lower interest rate. Here's a website to find your state plan: www.ncsha.org.
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