This scarf was more or less free. I knit it on needles I already owned using yarn a friend gave to me during time when I wouldn't have been engaged in a money-making activity anyway.
If you have a hobby, get to know others with the same interest by joining a group of enthusiasts. Search for them on Google, Meetup, Yahoo Groups, and Craigslist. And if you can't find a group, try starting one. Not only will you have people to share your passion with and learn from, you're also likely to pick up freebies and deals as a result of your relationships. You'll probably end up with some new friends, too.
In my case, I find that hardcore knitters always purchase more yarn than they can use and end up giving stuff away or selling it for very little. In the time I've been knitting, I've only purchased six skeins of yarn. I got five more for free, and paid $3 for another. I've also acquired a pair of knitting needles and had a pair of socks and a shrug knitted for me.
Knitting and other hobbies can become expensive quickly, but there are simple ways to keep your costs down no matter what your passion.