Check out "Uncle Buck's" threads, he's posted several articles on low cost ways to do things. Watch for more to come along, he's been posting one each weekend. Look for other posts on low cost ways to do things.
Watch construction sites where they are using foamboard insulation. Stop in and ask if you can have the scraps, good for building up your terrain, Check your local hardware store for cans of paint that didn't match what the customer wanted, but close to an earth or sky color for the layout, they are usually very reasonably priced.
You can dye sawdust, use twigs, real dirt and sand as part of your scenic material. When using real dirt or sand make sure you sterilize it and run a magnet over it to pick out any metal fragments that might be hiding in it.
For engines, rolling stock, track, buildings, etc watch yard sales, e-bay has some good deals if you are careful (watch shipping costs, they can make a good deal much less appealing), local shopping papers (you can advertize for as well as find items there), check with your local hobby shop, they may know of someone changing scales or moving that has items to get rid of. Check out model rr shows in your area ("Calander of evernts" at the MR website) they have some good deals (some not), good used, damaged packages and such are things to look for. Also, if you agree to buy a number of things from the same dealer, they may give you a discount.
Just a couple of ideas.
Have fun,