I am an average teenager, an average unemployed teenager, so all my money for this project comes from gifts or from one of my knitting commissions (For example I crocheted a tetris cell phone cozy for someone I know who will soon be in a tetris movie, that pocketed me about 15 dollars, all or practically all of which went to my doll project.)
The yarn is simple to obtain, thriftstores often have a yarn section. I could head to a thrift store and pick up two skeins of baby, sock, or fingering weight yarn for about $2.50 (my trusty google says this translates to 1.5726£ or 1.8921 euros). True, this is usually red heart or some other acrylic yarn but it works especially if you are like me and have allergies to most animal fibers.
Another option to use that you could also get from the thrift store is crochet thread also known as crochet cotton. When making doll clothes I usually suggest size 3 or size 10 crochet thread (size three is bigger.)
Both types of yarn can come in many vibrant colors including variegated (which I don't suggest for using for doll clothes because the color changes can become overwhelming.) Most of the yarn used in my doll projects are made from yarn from thrift stores.