These great tips come from Lauren Flanagan on About.com. Decorating a home can cost a small fortune. While it would be nice to go out and buy top-of-the-line items for every room in the house, for most people that just isn't feasible. What you can do is to mix top-quality items where it really matters with less expansive pieces where it doesn't.
Splurge: Mattress---people spend about a third of their lives in bed so it's worth it to splurge and get the best quality mattress you can afford.
Save On: Sheets---high thread counts are nice but not necessary. When it comes to bed linens you can also save money by mixing and matching sets. For example, purchase a bedspread that you really like but then buy inexpensive plain sheets since they don't get seen.
Splurge: Sofa---the sofa is one of the most important items in a living room. Look for high quality materials and classic styles. A high-quality sofa should last around 25 years while one of average quality should last about 10.
Save On: Side tables---these can be purchased just about anywhere and don't see much wear and tear so the quality isn't all that important. If you find some that suit your décor for a cheap price snatch them up.