as a budget reefer this is the route i would probably take if i was in your situation...
find a local reefer with a fairly large tank and sump. there should be some folks up in your area, you can find them through the pudget sound club on this board. go to www.hirocks.com
and purchase 50 lbs. of their dry baserock. it will come shipped to your door for $65.00 which is about as cheap as you will ever find reef safe rock. get your new friend to place the VERY WELL RINSED rock in their very large sump, if they can not take it all, try to get at least 25 lbs in there. a 25 lb rock from hirocks will be approximately a 1 foot by 1 foot cube based on the stuff dale and i got. let the rock sit in their sump as long as they will let you keep it there, prefarably a good month or so.
while your rock is going from dead dry rock to healthy live rock start saving again.
go to home depot and get some sand. southdown is preferable, and occasionally they have it, but you can almost always find aragonite based play sand which is basically the same thing, but not brand name (southdown has a really good trackrecord of good clean sand and consistant particulate size which are among the reasons it is preferred). take this sand, and rinse the living daylights out of it. i mean like 10+ times. you want to be able to put it in a bucket and stir it around while water is running over it without any particulate matter coming off of it. i would shoot to get at least 40 more lbs of sand in there to help diffuse the crushed coral and give you a nice substrate that most reef things will appreciate. the last thing to get at home depot is some pvc pipe. you should ask them if they have trimmings so you can get a variety of diameters. if not get a single piece of 3 inch pipe and either have them cut it, or make sure you have something to cut it at home. you want varying sizes from maybe 2 to 6 inches in length.
here is the fun part. remove everything from your tank, pull out the under gravel filter, add the new sand, and let the sand settle for as long as you can. i would get a piece of tupperware(s) and fill it half full, then place your fish in it/them and float it in the tank while the water clears so you do not lose temperature (alternately have a quarantine tank set up by moving day which is a good idea anyway and keep the fish in there). place the pieces of pvc on the sand, some sticking out of the sand, some laying on it to provide cover for the fish. be sure to point some toward the wall so that the fish can hide and think you can not see them. i would let the water clear for a good 2 or three days and let everything settle down a bit. i would leave your powerheads and hang on back powerfilter off for at least a half hour while stuff begins to settle, or it will suck in all the sand and grit and will possibly freeze up. you can let your fish back out as soon as everyhting is in place, but i would again give it a good 30 minutes so that things start to settle. it is my gut feeling that fish do not like swimming in sand soup.
(elapse time as long as your friend will let you, preferably about 1 month total sump time)
now go over to your new best friends house and retrieve your now live rock from them and bring it home. freak out your fish by once again collecting them, and once they are out of the tank remove the pvc and stack your rock in your tank however you see fit. you will instantly notice you want more, but that is something to deal with later. make sure that when you place your rocks, the ones that are flattest go on the bottom, ideally you want them worked all the way down to the glass (in a new setup you might put in rock first, then add the sand around it to be sure it is stable). build up from there. turn back on hang on filter and powerheads and let it run for a good 30 minutes, once again floating the fish in the tupperware to keep them from chilling. then you can release your fish into their new rock wonderland.
ok so now you have a tank with a good sand bed, 50 lbs of live rock, and no more undergravel filter. your next priorities on a tank that size should be to work on a sump to hold your heaters and skimmer. you can buy these as a kit, or make your own stuff out of wallmart and home depot items (with a couple things from the fish store) for fairly cheap if you are handy. once sump and skimmer come on line, remove the powerfilter from the back, as at this point it is no longer doing anything for you.
as money comes and goes you will most likely want to visit shops and buy smaller pieces of live rock to get some color in your tank. keep in mind that one of the tradeoffs for having 50 lbs of cheap rock is that it will all be tan, so if you want some purple or other colors going on it you will need to get some rock to seed it. this will also add interest to the tank.
when you have saved another 65.00 after sump and skimmer aquisition, i would buy another 50 lbs of rock from hirocks.com and this time, rinse it really good and just put it in your own tank. your existing rock will seed it just fine.
so at this juncture, over a course of maybe 6 months, you have gone from a hang on back and undergravel filter with lava rock and dead coral decorations to a nice 90 gallon tank with a good sized sand bed, 100 lbs of live rock, a sump, a skimmer, and a nicely cycled and stabilized tank. at this point you will decide what to do for lights (which will be the biggest expense of all), you will aquire them, install them, and then mosey on down to some frag swaps to get some stuff to get your reef going coral wise.
this is pretty much the exact formula i followed, with the exception of paying 6.99 a pound for 25 lbs of live rock before i found hirocks.com, and my little reef is as pretty as i could ever hope for it to be on my own meager budget.
good luck! and please feel free to pm or email if you ever have any questions.
and as mr. ono said, read read read and talk talk talk. until you know what kind of tank you want, you want to be really careful making any changes, as you might have to change them back later. take your time.
read the new marine aquarium and natural reef aquariums, both by TFH publishing and both at your local barnes and noble over a coffe at the book store for more information. i found both of these books invaluable, especially the new marine aquarium by mike poletta (or something close to that). it will answer questions you didnt know you had.