Probably the cheapest quilt I ever made was a baby quilt for a friend - the center panel was off of a $1 a yard remnant table, one of the borders was fabric that I was given, and the batting was scraps of batting my aunt gave me. The binding fabric cost about 50 cents at wal-mart. All in all, I think I had less than two dollars in the quilt.
Edited to add : I did use variegated thread, but it was thread left over from another project, so I don't count it.