Setting up for baby on a budget - less than $500
Well I think you can easily do it for under a thousand.
My partner has just had her first baby. We bought a 2nd hand cot (in perfect condition) for $40 through the local paper and then bought a new mattress (even though the mattress was fine we wanted a new one). We got the mattress on special at a baby store for $70.
My partner's sister bought her the baby car seat as her present (combined birthday, Christmas and baby birth). Though you can get reasonable ones for around $200 new (I would never buy a 2nd hand car seat in case it has been in an accident).
We painted up an old set of draws and I was given a change mat which we were able to screw onto the top of the draws. We then bought a baby bath for $10.
We picked up a range of baby clothes and plastic toys 2nd hand through the local paper, op shops and through a free "re-use-it" group where people advertise things they no longer need and give them away for free. We just washed everything again with bleach and softner or disinfectent for the toys and they are like new.
We have about 30 outfits for each size from 0000 - 0 so won't be needing to buy any clothes until bubs is almost 1. Most outfits cost less than $2 each and we got a few big boxes of clothes for free.
We got given a 2nd hand pram (in perfect condition) but you can normally pick up a good one 2nd hand for less than $100.
We also bought a baby carrier second hand for $40 (instead of over $140 new).
We spent the entire pregnancy checking out the paper, internet and op shops so that we could find the bargains and buy things bit by bit so it wasn't a sudden huge cost.
We are going to use fitted cloth nappies which are expensive to buy but my partners motehr has agreed to pay for these as a gift.
So I guess we have spent less than $500 in total but a thousand should cover it if you have to buy the carseat and nappies as well.
Babies grow so quickly that most baby stuff gets very little use so second hand gear can look just like brand new.