Have you considered going through your closet and perhaps consigning many of the items you no longer wear? Shoes, clothing, bags, etc. This might give you a few extra $ to put toward your budget.
I believe it makes sense to start with the best basics you can afford. A couple of nice pants (or jeans), several solid tops or t-shirts (in basics, such as white, black, light gray, and include a stripe, as well). These basics can be layered under a cute jacket (or two as the budget allows). Once you're able to add to your wardrobe, it would be great to purchase a few jackets ~ navy, white or cream, and a black jacket. I think texture can create so much interest to an outfit, so it would be nice for the jackets to be in a tweed or have some interesting, brass buttons (on a navy jacket). This is a personal preference, but I believe that jackets are a lot cuter and more feminine when they have a 3/4 sleeve. That way you can also show off some cute, stacked bracelets or bangles.
Then comes the fun stuff. Accessories really are the icing on the cake. Start adding in some belts (basics like black, chocolate brown, and nude) and an animal print. Belts add so much structure and polish to an outfit. Add a variety of shoes suitable for your lifestyle in black, navy and nude or metallic ~ ballet flats, pointy-toe pumps, wedges, flat sandals, etc. Add one pair of shoes in an animal print or snakeskin that can add some pizazz to a jeans and jacket ensemble, for example.
A variety of scarves is another easy way to add color to the combinations mentioned above. Scarves add interest, polish and texture (see the Eileen Fisher website for the video showing unique ways to tie a scarf). A long necklace is another way to really pull an outfit together.
Good luck, and please give us a progress report!!