for all of school - many years - , i used one setup: kenwood CD player ($250), Corda HA1 MK1 ($300), HD580 w/ oelhbach cable ($190). i was more than happy with that. eventually through savings and other money, i got a much better CD player (not my G08), but still used the other components. once i got a real job, i started to explore different types of headphones, amps, and other gear. my current rig is not cheap but is the product of many years in audio and on head-fi and a few solid years of full-time work.
however, just because i have a steady income does not mean that i spend recklessly. unless you are extremely well off, every dollar is important and needs to be accounted for and spent wisely - esp. when you are independent and solely responsible for all the bills, rent, repayment of loans, and other expenses.
so i would say to those who are in school or otherwise on very limited budgets, save for an acquire a modest setup - buy used to get the most from your dollar - and enjoy it. in time, you will be able to buy more.