I think that rods are pretty unimportant really. I started fly fishing about a year before graphite became available in Canada, back in the 70s. My first fly rod was a Hardy glass rod. As soon as I could, I got a graphite blank, and some parts and never looked back. That was change you could believe in. Nothing comparable has happened in rods, and a Canadian tire graphite salmon rod I bought for the kids to use, maybe 35 bucks, is a bigger gun than that Hardy, though it is short a guide.
It is no longer an industry secret that a lot of the Magic New Graphite rods that come out every year, IM666, or whatever. Are basically uncastable by mere humans, and certainly never that useful on the water. There is a way to play almost any rod action, tactically. I am a real rod snob as I make all my own, and was in the industry for a while. But I have yet to see anything happen that is like what happened when carbon came in. Maybe nano tubes, or something will arrive on the scene, and we will all be able to fish on the far side of the lake without a boat.
Reels used to be the thing people told you not to waste your time on. But back when a McDonalds burger was 25 cents, a crap fly reel was 35 dollars. Today that would be 5-10 times more, adjusted for inflation. And there are nice looking reels for as little as 60 dollars, so why worry.
I buy lines off ebay, old Cortland 444s that I can score for 5 bucks, they still work great. I bought one of those Chinese lines, but I have not really tried it yet.
The cheapest way to improve your gear is to look into leaders, they are magic. I use Bolger's formulas for general leaders, they often require only one more knot than a bought leader, would and they work better, by far. His version of a Harvey leader is dry fly magic. And there are all kinds of easy to tie of no tie leaders for things from salt water to Polish nymphing, Biggest gain for the least effort and dollars is in leaders.
http://www.rackelhanen.se/eng/10058.htmThis article shows the Harvey leader. The original is 7 pieces and 6 knots. Borger's is 3 pieces and 2 knots. Since a lot of people will slide a leader out of the pack and immediately tie on a tippet, you are only tying two knots where you would usually tie one, and you get a much better leader.
The Harvey leader is great for dries, and some kinds of nymphing, but it is basically designed not to turn over your fly. To land it will s bends in the leader.
By Bolger has designs for all basic purposes. The basic idea is that you can make a functional leader with a single piece chosen to bend without a hinge from the fly line attachment. You would use the lightest piece that does not hinge. Then you drop down to the next piece by making it 35% less in diameter, than the first piece, all the way to the end. This is a huge drop compared to all the spools and knots we used to fiddle with, and it works just as well. I think the original material was in his book Presentations. But you might have to dig to find it on the net. He has a description of his uni leader on his site. But that concept seemed like a step backwards from his simple formula. It allows you to adapt any leader to anything, but you need a bunch of different spools, and hacking away at both ends to make the changes. And I normally find having a selection of leaders is easier for me. I keep the material in the car and can make almost anything should a tarpon swim into a local Ontario river.