An idea: I got a set of dumbbells at a local fitness store when they were changing brands at like 35 cents a pound. My set goes up to 80 pounds (by 5's up to 50, then 10 pound increments), and I think I paid about $350. The rack was maybe $120? That and an adjustable bench will hit about all you need. I also have a cage with a set of plates, a straight bar, and a bent/curl bar. I picked up a twin-tower Cybex unit with high/low cables and a lat attachment at Play-It-Again before we moved here -- at a STEAL. It was big and they let it go way, way cheap. Look around and you can find great deals on home equipment.
All in all, I spent less than what two years of a nice gym membership would cost, and now I never have to leave the house and family to get in a great workout. The only thing that I'm a little short on is leg equipment, but you can hit most with squats, lunges, deadlifts, and calf raises.