I'm ready

I'm not especially talented but I've found a couple of easy things to do to make my haunt what I want it to be. First thing i do is plan it out in my head what I want it to look like, then i draw it on paper, what will go where, what i want to make and where it will go, etc...
Right now I'm taking garden stakes and cardboard triangles that i cut out, i assembled them together with just adhesive spray and staples and sprayed them black, it's super easy. Next, i got skulls from the dollar store, I'm cutting out the eyes with an exacto knife and putting in flickering tea lights. The skulls will be impaled on what look like pikes. It's very easy and less than $12.
Another thing i like to do is modify store bought stuff. I got $1 tombstones from the dollar store, resprayed them grey and pained some to glow in the dark, that's also super cheap and easy, glow paint is about $4.
Buy a blucky and corpse it, there are some great tutorials on here that show you how, also super cheap and easy to do.
Start small, then as you get more comfortable making things expand out to more complicated stuff.

A couple of tips to keep your expenses down:
Dumpster diving behind businesses - if you find an industrial park, check in the alleyways after hours (yes, dumpsters), and you'll likely find some very usable items.
Be careful not to take something that might still belong to the business - checking the trash is one thing, stealing is not acceptable.

Also, craigslist - check the "free" section on your local craigslist...I am dumbfounded at some of the things I've seen listed. I'd need a warehouse to keep all the stuff in that I wish I could have brought home, just from the "free" section.

You mentioned paper mache? Great idea! Cheap, and so much can be done with it!
Some old newspaper, a cheap bottle of white glue, some flour, starch and salt (all very cheap), and you have the basis for creating your own horrifying masterpieces (best thing with mache? If you do screw it up, it's not like you've wasted money on materials).

You can get wig heads from the beauty supply stores if you can't find one anywhere else. They're usually about $4 or $5. You can make a figure very easily with a long stick or some kind of stake, a short stick for the shoulders, and then add arms by stuffing paper or plastic grocery bags into the clothing you have picked, and bulk up the figure also, and use duct tape for everything. Stick that wig head on with a mask and wig and you got yourself a being.

Thrift shops like Salvation Army, Goodwill, whatever kind you have nearby are great sources for clothing and accessories. Look at everything you see with the thought..."how can I use this for Halloween?" You don't have to necessarily use things for their original intended purpose.

Flat black spray paint (can be found for less than $1.00 at stores such as Wal-mart). Dollar Tree has some great Halloween items that can be used as-is or enhanced with paint or added to something.

If you decorate indoors, you can also use fabrics from the thrift shop for creepy curtains, tablecloths, general draping. You can also find tableware and other items that can be painted and embellished to make creepy candelabras, lamps or centerpieces.

Look through the websites that were posted earlier, and also look at the tutorials here and the crafts section for some awesome projects that don't require a lot of tools. You can also find tools at the thrift shop by the way!

There's many good tutorials on this website. If you search Halloween props, tutorials, haunted houses, etc, you'll find tons of websites to give ideas, tutorials, helpful hints...
You can find inexpensive things in the clearance section, thrift store, goodwill, garage sales or even on the curb once in a while. Dumpster diving is another way you might be able to get some supplies, or at least packing materials.
Just about everything can be made cheap and easy with a little creativity as how to make it. You can make your own tombstones out of foam or wood, or fix up really cheap ones from the dollar store. Prop characters can be made out of anything too- 2x4s, pipe, pvc, for the body, I think frankies girl was the one who used an old artists easel for a witch's body.
You can make faces out of clay, mache pulp, or just paper mache or wig heads.
Soundtracks or scary music can be found for free on various websites.
Good luck!