As I mentioned in my post 'caring for a one week old', you should dress babies in a vest first, then layer up. So even in winter you will need short sleeves vests. Usually they come in multipacks, they are rarely seen so do not need to be expensive. Also try to buy outfits with vest rather than tops underneath. These cover the nappy and keep your baby warm and comfy.
If you know someone who can knit, knitted blankets are lovely and warm, they will last a long time and look beautiful in the nursery. A few knitted hats and boots are also useful. It is handy to have a few cheap plain blankets for prams and going over your baby in a quick journey in the car. You will not needs lots of duvets as babies do not get that cold. We loved our moses basket, however it wasn't essential. So if you are cutting costs maybe just have a cot. You will also need a few cot sheets. Sleep pods are another thing which are useful but not essential.
Before Poppy was born we had lots of hats and scratch mits. These fall off and aren't necessary for very long. So just get a few pairs. Muslins are very useful however. Lots of them, you can buy thm in most baby stores are supermarkets. You can put them on the changing mat, over your shoulder, to wipe a dribbly chin. Old towels are useful like muslins, so if a relative has some old towels stock up. Other essentials you will need to get before your baby is due are nappies (newborn size), wipes (or baby lotion), cotton wool and nappy sacks. Don't worry about using bubble bath and shampoo until your baby is a few weeks old but stock up whenever you see them on offer. Bedtime babble bath is good for getting your baby sleepy in the evenings. We found a bath support incredibly useful, we still use it now in fact. This saves you from buying a baby bath which your baby will soon outgrow. Poppy does or have a dummy. Not all babies like dummies so wait and see if your baby might need one for comfort. When weaning bibs with sleeves are a life saver. Trust me.
Your baby won't be able to hold toys for quite a while so just a few soft animals or teddys to make the nursery look nice is all that's necessary really. What I found invaluable was a playmat. They have rattles and toys hanging close enough so that your baby can watch them. When your baby is young they will not want to be put down, a play mat can be distracting enough to give you a free minute to do something or even sit and have a cup of tea. Lots of mums swear by musical swings and bouncy chairs too. So I would buy at least one. A cot mobile is also a nice feature in the nursery and babies love watching them. Some babies find them soothing and fall asleep watching them.
For the medicine cabinet we have so far used Calpol for after jabs. The infamous Infacol for wind. We have also used Snufflebabe for decongesting during a cold. For teething Dentinox is a good place to start. Babies can't have most medicines until they are at least three months old.
I hope you've found this useful when preparing for the arrival of your little one!