Should you quit? Heck no! Quilting can be discouraging when you're starting out because you have not accumulated a stash of fabric yet, which is more discouraging when you don't have the funds to build one. When I started out I was forced to buy only what I needed for a project I planned out because I wasn't working regularly at the time.
Check out local quilt shops and see what sort of deals they have. Many quilt shops have a spot reserved for heavily discounted fabric and items. A quilt shop I frequent to has "bag lady day" on the first Thursday of the month: any fabric you can fit into their reusable bag is 20% off. They also list any big sales they have planned on their website. A quilt shop I just visited for the first time gave me a punch card that gets punched for every $5, $10, or $20 I spend---I'll get $20 in merchandise for FREE when I punch the whole thing.
Online shopping might be an option for you as well. Depending on where you look you can either find reasonably priced fabric or score an awesome deal. thousandsofbolts.com claim to have over 5000 fabrics for under $5 a yard. missouriquiltco.com has reasonably priced fabric and you also earn "quilters cash" on each item, which you can use on a later purchase to get a discount off your total. Joann and Hancock Fabrics have online exclusive deals (by the way, there's a sale on every yard of fabric on joann.com until tomorrow
) Even you can find decent fabrics for cheap on ebay.
When I started out I bought lots of solids (fabrics that are a single solid color). Solids are cheaper than fabrics with prints on them. Sometimes the cost of solids is half as much as prints. I think Missouri Star Quilt Co. sells Bella Solids for a little over $5 a yard. Hancock's carries Kona Cotton and I've seen them go on sale for 30% or more.
Usually when I go buy fabric for my stash I buy either 1/4 or 1/2 yards (full yards when I can afford it). So if I go into a shop with $20 and all the fabric I want is $10 a yard I can get 4 1/2 yard pieces or 8 1/4 yard pieces. This gives me some variety. I can either make smaller projects or wait until I've built up enough pieces to make a quilt and supplement them with a larger amount of white or black fabric. Also, after you've cut your fabric and you're left with any large scraps: save them! I save anything I can cut at least a 2 1/2" square out of. I have a project going on right now that had me cutting out circles and I was left with a lot of scraps...I had enough of them to cut out enough squares to make another quilt!
And your nephew totally has it wrong. Since you're doing all the work on the quilt YOU should get 95%.