Something worth considering is a Celestron Firstscope though. It's pretty cheap and gives nice views of the moon. You'll be able to see Jupiter's moons and just-just make out Saturn's rings with the provided eyepieces. Many of the slightly brighter star-clusters will be within view as well. Some models of it come with finder-scopes, if it doesn't a simple red-dot is cheap enough. I have one and I was quite impressed, I thought it was going to be rubbish bit I was pleasantly surprised. It's nowhere near as good as my 4.5" Orion reflector, but it's not bad.
I'm currently in the process of grinding a mirror for an 8" reflector, similar to a friend's. The endeavour is costing me the equivalent of around $150 (spread over whenever I need bits and pieces) but I'll end up with a scope of similar quality to what you can buy from $350 - $500.