I wrote this in 2004, while living in Los Angeles. Some of the prices I cited are no longer common, at least not where I live now, but the principle still applies.
In the course of my work I have a lot of opportunity to hear from people about how expensive Passover is. Some of them are just complaining for the fun of it; others are offering a justification for not observing it as fully as they think I think they should.
But the truth is that Passover doesn't have to be as expensive as that. True, there is some extra cost in a seder meal. That's because you're likely to spend more for any festive meal, and especially because of the wine. But you can exert some control over the seder menu, and the extras that you need specifically for a seder (karpas, maror, zeroa - greens, bitter herbs, and a shankbone - and the fruit, nuts, spice, and a bit of wine for charoset) aren't very expensive by themselves.
What is expensive is buying special Passover foods. Matzah itself is cheap, and, except for the requirements of the seder, matzah is the only special food that you really need for Passover. In some cities, chain groceries will give you 5 pounds of matzah free with a sufficient purchase.
Where I live, no store has a free matzah offer, but today it was possible to buy 5 pounds of matzah from Israel for 99 cents to $1.29, using store specials and a coupon from the newspaper. Manischewitz matzah would have been $3.99 for 5 pounds; if you buy Manischewitz products throughout the year, this could be a better value because of the coupons on the boxes.
If you want whole-wheat matzah or another special kind, it will cost more, but it's still not the price of matzah that ruins your budget.
The foods to avoid are the special Passover versions of regular food, such as kosher-for-Passover noodles, pizza mix, cake mixes, and so forth. Most of them aren't very good, and they're very expensive for what they are. Beware of Passsover breakfast cereal: it all tastes like matzah, so you might as well eat some of those 5 pounds of matzah. Skip the kosher-for-Passover mustard; it's basically library paste with mustard flavoring. Use horseradish instead.
But what else are you going to eat? Instead of using a lot of analogues of regular food, plan menus that are naturally kosher for Passover. While you're buying those 5 pounds of matzah, buy 5 pounds of potatoes, or 10, and serve potatoes instead of pasta or rice (if your observance doesn't allow rice).
Essentially, aim for simple cooking using fresh ingredients as much as possible. Simplicity is very much in the spirit of Passover, and nowadays cooking from scratch adds an element of festivity that expensive pseudo-foods can't match.
Now, desserts could require some effort, if your household expects anything other than fresh fruit. This week many stores have deals on macaroons at 99 cents/can, but how many macaroons do you want?
Nevertheless, the Passover cake mixes are barely satisfactory, and they make small cakes. For the price of one box of cake mix, you could buy both matzah cake meal and potato starch, enough to make any number of full-size cakes. Either way it will require a lot of eggs, but fortunately eggs are always on special right before Passover (because suppliers and stores manipulate the supply for Easter). So, if baked goods figure in your plans, it is worthwhile to buy the basic ingredients and invest some time in home baking.
For other special foods, all of which are optional, careful shopping can save some money. One chain store here has Manischewitz gefilte fish for $2.99/jar this week, and there was a $1.50 coupon in the newspaper. The coupon wasn't supposed to be doubled, but the store doubled $1 of it, so the net cost was 49 cents.
One thing you may find hard to obtain, depending where you live, is a kosher shankbone. Kosher butchers save them starting months in advance, but in smaller cities they may be unobtainable. Vegetarians have an advantage, because the traditional vegetarian substitute is a roasted beet. I am not vegetarian, but at my house we use a sweet potato, otherwise known as the Paschal yam.