Biking can be an expensive hobby, if you want to get around for free... walk. If you want to get around faster for next to nothing, it still going to cost you, especially in maintenance department, but for the miles you will cover, we are talking real pennies.
Get yourself a good bike maintenance book and skip on the LBS repair fees. Obviously there will be initial expenses buying tools, but if you plan on cycling for life these are an investment which will keep you moving, also having the skills and knowledge to fix your own bike on the side of the road will get you out of the odd sticky situation.
If you don't have loads of cash, just buy them as you need them. I'd recommend budgeting £20 a month towards tools until you have all the basics, and wait to buy the more advanced tools until you have more money. Certain tools are totally unnecessary so choose wisely, while they can make life easier (i.e. pedal spanners) if you can bodge it with a adjustable spanner that you already own, do that. You won't be changing pedals every day, and if you are, you are likely providing a service to someone that can make you money (this is an interesting point, and I don't know why more people don't offer bike repair services to their friends/family or to strangers on the internet to make a bit of money on the side).
Cheaper components often get bad rep from bike snobs, but I've never had an issue with £2 gear cables or budget chains and rear cassettes. Why anyone bothers to fork out for Shimano/SRAM/gold plated whatever I don't know.
I definitely second having a backup bike if possible, while you are tinkering with one frustrating issue (like my bent rear derailleur), you can at least get on and ride the other bike. Opting for a steel frame bike, while heavier, will be bomb proof and should last you a lifetime if well maintained.
I also support the logic of spending more on clothes, cheaper clothes are false economy as the material is weaker, stitching is often of poor quality and they generally don't last as long or feel as comfortable and will die after 50-100 cycles in the wash. Skimping on clothing is doing yourself a disservice. If you can buy two pairs of decent quality bib tights, (one long and one short for each season), thermal jersey and summer jersey and a few base layers and arm and leg warmers and a rain jacket, you'll probably notice they last several years longer than the Aldi kit.
By only washing stuff when it really needs to be washed, i.e. just change base layers each day, but use the jersey 2-3 days before washing, this will help extend the life of these certain items considerably. Washing machines destroy the fibers in the materials over time, so only wash when your clothes start to smell. A good merino jersey and base layer can be worn for several days before smelling, polyester based items will not fair so well.
Good quality materials will therefore last longer, good materials with sound stitching will therefore put up with a lot more wear before falling to bits. And when the stitches fail, or material is ripped following a crash, learn to repair them yourself. Using your day to day clothes on the bike is going to wear them out, i.e. the crotch in jeans, and if your anything like me, you will own only a few good pairs, stick with biking gear. I learnt the hard way (bye bye favorite Levis!)
Deciding where to draw the line on spending is tough, as already pointed out a pair of Rapha shorts will set you back some serious dough, but if you look after them they retain value and can be sold on to recoup some of the cost. Read up on amortisation. You shouldn't look at everything you buy as sunk money. This applies to all your biking assets, the bike, the tools etc. You can recoup much of the money spent if you treat your tools, clothes and equipment with care. Even more so if you buy used but in good condition in the first place.
