updating our children's furtniture

Looks like our little ones are getting a bit too big for the hand me down furniture they've been living in (a day bed from my bachelorhood) and a convertible crib (now bed) from our first.

Our strategy looks like we'll do the following:

1. convert the convertible crib bed to a full bed $200 (conversion rails). I'm hoping we can save the full size mattress from the day bed.

2. buy a new bedroom set for our littlest. I'm sure it doesn't mean that mommy and daddy's bed is any less attractive, warm, cozy and less scary, but... it does make a nicer cozier room for our littlest. I'm guessing this will be a full bore furniture set from costco $1200 - $1800.

Anyone have any alternatives?

Regards,
makingourway