The key to looking expensive in cheap clothing, is to remember that it's all in the fabrics and the details. Avoid polyester at all costs. Even if you think it looks fine when you buy it (which it probably doesn't), as soon as you wear it once it will be covered in pills. Try to stay away from synthetic materials altogether. Look for fabrics such as cotton, silk, wool, or cashmere or a blend. Also check that jackets and skirts have linings, this not only elevates the garment, but it will prevent skirts from riding up or being see-through.
Keep an eye out for the details on clothes. Covered buttons, exposed metal zippers, pockets, satin or leather trim, lace details or little gathers all make garments more interesting and seem like they are more expensive. Beware of nylon zippers, exposed ones look terrible and be careful with hidden ones as well because they tend to break more easily than metal ones.
Cheap shoes are generally something I don't reccommend. Even you are spending less money be sure that they are genuine leather. Sorry to all the vegans out there; faux leather can look good, but it going to cost you, try Stella McCartney. The other unfortunate thing about cheap shoes is that they tend to be quite painful. Bloody toes are a fashion don't.
Do not wear any clothes that are torn, stained, too big or too small, faded, unravelling, missing buttons, or stretched out. This makes it look like you pulled your outfit out of a dumpster, and you can't get much cheaper than that. One would think that this was a given, but from what I have observed in the world around me it is not.
Some great places to find cheap, but expensive-looking clothes are H&M, Zara and Forever 21. Zara is great for super-trendy, right off the runway pieces. Forever 21 is good for cute dresses, cardigans, and fun tops. I have included pictures of a bow tee shirt, a black strapless dress and a floral shift dress (which I own, and I love it; it was about $35). The spring Garden Collection from H&M has some great feminine pieces at great prices. I have a picture of the awesome red flower applique jacket ($70). I'm so sad that the colour was all wrong on me. The floral bustier is really cute, too. The pale pink dress (about $35) is really pretty and tight enough that it can be worn under a skirt as a top. I have gotten many compliments on it, and one lady even said it looked like Valentino! What could be better than that?