If you're getting thrift store fleece, be sure to hold it up to the light to look for thin spots. You don't want it if you can see the light through it! Fleece may be a lot bulkier and a little heavier, but it can be just as warm and is certainly a far better choice for the low budget crowd! There is so much fleece available that I definitely would hit the low budget or thrift stores rather than the expensive stuff in REI.
I personally prefer two thinner insulating layers to one thick one so I can more carefully regulate my body temperature in varying conditions. I use a Montbell UL Thermawrap (discontinued color bought on sale) plus a 100-weight fleece vest. No reason why you couldn't do the same with a 200-weight fleece jacket, a 100-weight fleece vest and a light nylon windbreaker.
A simple inexpensive unlined light and thin nylon windbreaker can substitute perfectly well for a pricey lightweight wind shirt. It might be an ounce or two heavier but it will work just fine. It's cheaper and more versatile than the expensive "windproof" fleece. So many of these cheap windbreakers have a flannel lining (often cotton) that you may need to cut out the lining to make it work (sometimes all you need for warmth while hiking is that thin nylon layer to keep the worst of the wind off). Be sure the windbreaker is big enough to layer over the fleece! (Your rain jacket should be big enough to layer over both in case of really cold, wet, windy weather.) Again, you may luck out and find a windbreaker in the thrift store.
Check the athletic departments of big-box stores like KMart, Target, Wallyworld, Costco. Nylon track pants and shorts, wicking baselayer shirts, etc., far cheaper than in places like REI. I've been told that Costco is a great place for merino wool socks! Watch for sales!
One low budget item that I used was the $5-6 KMart aluminum grease pot for cooking. While they eventually get too dented and last only a couple of years, you can buy many years' supply of them for the price of one titanium pot that won't be much lighter.
For your pack, consider doing a little butchery (or, as a poster on another forum suggested, "Backpacks Updated Through Creative High End Remodeling") with a seam ripper and scissors to remove unneeded gewgaws, the lid, etc. You might get as much as a pound off it, and (assuming the pack is comfortable for you) will save a lot of money over buying a new pack! If you're shortening shoulder straps or waist belt, though, be sure to leave them long enough that the pack fits over all your warm clothing!
Watch for used gear, here and on other forums as well as the inevitable EBay. Of course it's caveat emptor (buyer beware). Use your credit card (more protection for you) if you can–but don't buy more at a time than you can pay off within the grace period to avoid interest charges.
The one item I'd splurge on, if you can, is a really good and accurately rated down sleeping bag, such as one from Western Mountaineering. If you can't do this, consider the Campmor down bag, although it's more nearly a 30* F bag than its advertised 20*F. At least it is reasonably light and won't set you back big bucks. Hopefully in another 5-10 years you'll have saved enough pennies for that WM/Feathered Friends/Montbell/Nunatak bag!
Watch outlet sites like Sierra Trading Post, backcountry.com's outlet, and altrec.com's outlet. The last two often have 20% off coupons on their regularly priced stuff, as does REI (except for REI you have to be a member). I haven't tried moosejaw.com and have heard both good and bad things. By googling items regularly you can often do comparative online shopping and find the best price. Some (not all) of the "cottage manufacturers" like Six Moon Designs and Tarptent have year-end sales.
The main thing is not to be in too much of a hurry so you can find the best bargains. So what if you have to use the older heavier gear for a while, just take shorter trips. Work at eliminating unnecessary duplication of items (like several changes of clothes, socks of course excepted)–this may be whittling ounces rather than pounds, but it all helps. Make sure each new piece of gear is what you want before spending the money. Once you've bought it, try it at home to make sure it works and, if not, be sure to send it back within the time limits and other conditions (like the tags still on) of the vendor you bought it from.
Sometimes you have to suck up the extra shipping cost for returns of items bought online. That's far better than being stuck with something you don't want, though!
You might want to look at some of the articles and gear lists for Scouts listed on this site; that may help your budget, too!
Set up a spreadsheet of your gear with weights. Your first investment should be a digital postage scale that weighs to the nearest 0.l ounce. The spreadsheet also doubles as a checklist when you go on trips. Its primary purpose, though, is to check on the weight of each item so you can instantly determine the effect on the total. Remember, though, that manufacturers' weights are often overstated. I take my scale with me when I go shopping, (to the horror of clerks at REI).
