To quote Coco Chanel, "Fashion fades, only style remains the same". Some of the clothing found at a department store looks as if it was sold at a thrift store, and vice versa. It is easy to avoid department store prices while still looking elegant.

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[edit] Steps

Make sure you are always on top of your personal hygiene.
Make sure your hair is kept well, no matter the cut or the length. Keep it brushed and neat.
Keep nails clean and trimmed evenly. Also push back and remove excess cuticles.
Wash your clothes! Keep them clean! It's not too pleasant to have dirty clothes.
Stick to classic pieces. Some clothes are never out of style. Black and white and light colors are NEVER out of style.
Choose clothing with simple, but flattering lines, appropriate for your body style.
Select clothing made of fabrics that are easy to clean. For example, rayon/cotton blends will wash well on most automatic washing machine settings, dry easily in any dryer, and resist wrinkles.
Choose quality over quantity if you can only afford one nice pair of shoes, choose them instead of 5 or 10 pair of cheap shoes.

[edit] Tips

Look through fashion magazines to get ideas, and take notes on them so you can re-create the hot looks with your own, less expensive items.
Go to thrift stores, flea markets and yards sales, to look for clothes and shoes. There are some great, inexpensive finds out there.
Check out the local '99 cent' or 'dollar' store. They sometimes have great deals on small and unique items (including make-up) that can dress-up an outfit These might include items such as make-up, scarves, and barrettes.
Stay simple; it's easier to mix and match that way.
Shoes can dress-up or dress-down an outfit. Make sure the shoes are appropriate for your intended use. For example, no high heels at the beach, no flip flops at work, etc.
Pick shoes that can multi-task well! Find a nice mid-level heel that can be worn well with either skirts or pants. Thrift stores can be a real boon for multi-purpose shoes.