I have a 7 year old boy and almost 5 year old girl.
For starters, I have the blessing/curse of 2 grandmothers who like to buy them clothes. It's mostly a blessing obviously, but the curse part is they sometimes buy really weird or ugly things, or they buy too much of something impractical (cute dresses) but not the things we really need (snow boots). In total though, they cover a decent chunk of the kids' wardrobe, either directly or by returning the weird stuf and getting what we actually need. And in fact I am sure we puzzle people as they note my kids wearing expensive fancy clothes (my daughter has tons of Hanna Andersson clothes, for example, all gifts) and compare that to what I'm wearing. They probably think I just let myself go to pot :)
I used to try to by stuff ahead on clearance, but I found it didn't save money. I couldn't accurately predict sizes (not strict sizes so much as fit- are they going to be skinny or chubby in a year? ) or preference. DD had years she wears only dresses and years she refuses to put one on. Or I would buy pants ahead, only to have a growth spurt over the summer and they would skip a pants size.
I make sure I can hand down the expensive stuff (coats, boots, and snow pants are all gender neutral and used by both kids) and DD wears plenty of "boy" clothes. If fact I prefer them often, as "girl" clothing gets increasingly tight, short, and innapropriate as they get older.
They stain, rip, or otherwise wear out quite a bit of stuff, so I don't end up with tons leftover to pass on. I never can pass down shoes as I buy one pair in each size, plus one extra in case the first is wet (the extra is sandals in the summer, and the cheapest tennis shoes I can find in the winter). Their main pair is destroyed by the time it is outgrown (in fact I am currently doing a warranty claim with Keens- DS got new Keen tennies in August and has destroyed them due to the bad strap design).
The most expensive stuff is definitely the one-off stuff like snow gear, raincoats, and swim suits. I can always get basic shirts and pants for cheap, even buying new at Target. It's hard to estimate because fine year they might need all new outdoor gear, but the next they might be able to re-wear it all. And of course that is the stuff I never find used!