Check out this article on when to save or splurge on make-up:
Drugstore vs. Designer
Personally, I think the author is pretty much spot on. I've found that when it comes to foundation, "designer" brand foundations are best! Of course the upfront cost is a little intimidating at times, but if you consider how long it lasts, you're only really spending less $10 a month on it (assuming regular daily use over a 5-6 month period). I like to think of it as investing in myself :) After all, I'm putting that stuff all over my face. I want to use the best so I can look my best! And speaking of foundation, my current favorite is MAC's Studio Fix Fluid.
The only thing I kind of disagree with is the bit about blush. Some of the best blushers out there happen to be drugstore brands. My favorites out of my entire collection are my Barry M and NYX blushers. While NARS and MAC are big favorites amongst make-up enthusiasts, I think you can get away with using the drugstore brands.
So readers, which side are you on?