Buying a bird and setting it up in a new, happy home can be a big investment, but you don't need to purchase much of the gear some retailers suggest. Some of the products out there are more than unnecessary — they're dangerous.
No matter how much essential (and nonessential) stuff you buy for your bird, there's one thing not to cut corners on: Start with a healthy, well-socialized bird from a reputable breeder or bird shop, and have an avian veterinarian examine it (and include a baseline laboratory workup).
Here's a list of supplies that you absolutely need for your bird:
A well-designed, safe cage of appropriate size for the species. (A good rule: Choose one size bigger than the label suggests; for example, choose a small parrot cage for a cockatiel.)
A diet appropriate to the species. For most birds, a pellet diet supplemented by fresh vegetables and fruit.
Stainless steel or crockery (with nontoxic glaze) bowls.
Perches: wooden, rope, natural branches (such as manzanita or citrus), and cement.
Sturdy toys for amusement and exercise.
Squirt bottle, for misting your bird.
Nail trimmer (dog or cat) variety) or Dremel tool for blunting nails, plus styptic powder to halt any bleeding.
First aid kit (buy one ready-made or put together your own)
Travel cage or carrier.
Things you shouldn't buy, but may be told to get anyway:
Over-the-counter medications, including antibiotics, feather-picking "cures," vitamins, or parasite controls
Plastic toys that can be swallowed
Nesting boxes (except for a breeding bird)
And lastly, there are some things that are nice to have — for you and your bird:
Air filter and humidifier
Cage skirt to catch food and other messes
Identification, either microchip or leg band