With two little boys who wear the same size, I have to purchase double of everything, which has the ability to get very expensive, very quick. My husband and I have always enjoyed going thrifting at our local Salvation Army or Goodwill and I make sure to look at the children's clothes every time we go. Sometimes I'll load the boys in the car and go with them by myself. I have had some awesome finds, but have also come away empty-handed. Thrifting is always uncertain.
If there's anything I need specifically, or if I just haven't found it thrifting, I will shop at an upscale second-hand store, Once Upon a Child. Although this type of store is more expensive than a Goodwill, it is much more affordable than buying everything new.
That said, I have also bought new items, but I try to get them on sale or clearance.
My one biggest piece of advice though is to like what you buy. I could fill my kids' closet in one day by going thrifting, but I will only put them in a fraction of what I bought if I don't like it. So even though it's a deal, it's wasted money if it's just going to sit in a drawer.