It depends upon the simplicity of your idea.If you are planning to design an engine,modify it or choose robotics, then definitely your overall cost soars up.On the other hand, if you are able to come up with an idea that's simple enough to work out (like some new pump,non conventional energy harnessing) then you have multiple advantages like lower cost,little use of machinery,neatness etc.I am doing my final year project work on a wind turbine made out of simple materials.I am glad to say that we have it all in our control and also able to control the costs.
Materials can be purchased from second hand shops or wholesalers.Except for critical components like bearings old substitutes can be used.High accuracy and precision always demands more money.
As far as I've experienced, fluid mechanics based projects are easy and requires less cost.