Hiking clothes and backpacking clothes need to function to a higher standard than everyday clothes. That's why they're often more expensive. Shop all the sales you want, and you will save money, but that extremely expensive waterproof/breathable coat will only be marked down to "very expensive." Time for some more radical ways to find cheap hiking clothes.
Consider what you really need for the trips you have planned. If you'll be scaling peaks in Patagonia for a month, you may have to stick with the best sales you can find on the high-quality stuff. If, on the other hand, your trips are fair-weather overnighters, a two-ounce, two-dollar plastic poncho isn't out of the question.
Even on the more extreme trips you can often find cheaper alternatives. Did I take a $400 waterproof/breathable rain suit to the top of 20,600-foot Mount Chimborazo? No, I took my papery Frogg-Toggs rain suit. You'll find these at golf shops, and yes it's waterproof and breaths well too. It cost me $49 for the set, and I have used it for years, on many rainy trips, with only one duct-tape repair.
Do you like to hike in running shoes, as I do? Start watching the sales on out-of-style shoes. I've bought brand-name $90 shoes for just $25. With savings like that, I'll gladly be out of style.
I stopped getting blisters when I gave up on expensive, high-tech, too-hot hiking socks. I hike thirty miles now without a blister in comfortable, lightweight, white nylon dress socks. They're less than an ounce and about a dollar per pair.
Buy Used Hiking Clothes
The only hiking clothes I won't buy used is footwear. Other potential backpacking clothes are worth checking out whenever I find them at a rummage sale or thrift store. I've found a Gore-Tex rain jacket and North Face vest at a thrift store for a few dollars each. My thrifty used wool sweater weighs just 11 ounces, and is almost as warm as the newest models.
One of my favorite thrift store discoveries was silk shirts. I learned that they weigh just tree ounces, and show up on the racks regularly for $3. They are comfortable too, though on the trail some of the styles make me look like I'm searching for a wilderness disco.
Making Hiking Clothes
I can't recommend sewing your own hiking and backpacking clothes, but I have made a few simple things. The sleeve from an old thermal shirt became a one-ounce ski mask with scissors and three minutes of sewing. Socks with finger-holes make nifty hand warmers. As an insulating layer, I wore a four-ounce piece of poly batting like a tunic under my Frogg Toggs, to the top of Chimborazo and other mountains. Finally, without too much sewing, you can often modify clothes to make cheap hiking clothes.