When I started playing 3 years ago, I wasn't sure if I was going to stick with it. I spent $270 for everything: Silvertone bass (that someone had installed EMG's in), 10 watt practice amp, cable, bag, nylon strap. I sold the bass, strap, and bag for $200 last year.
Five months after I started playing I scored a Fender Bassman 100 off eBay for around $280. Not the new smaller, lighter tiltback style. I am still playing at church through that amp.
A little over a year after I started playing I bought a 5-string Jazz from Rondo Music for $150 shipped to my door. I play that bass every Sunday at church.
Last year I bought a Fender fretless Jazz for $325 from a local store and a Crate BX-50 combo amp for $80 off eBay. I still have both.
Where am I going with all of this? Like floaded said, if you have a family or if your playing needs are modest, then by all means let your equipment reflect that. My wife loves me dearly and she supports my playing 110% but if I came home with a $2,000 bass she would not be happy with me. It's very unlikely that I will ever spend that much a bass, or even half that much on a bass, but I am OK with that. The same goes for my amp.