We used to be a family of 8 and had little to no money. We shopped at Good Will or Salvation Army (which I still prefer to this day when I can afford pretty much anything now) and had friends who donated and "recycled" clothes. We did the same thing back when ours finally grew out of them. I agree, a small child like that should not have the peer pressure to deal with like a teenager does, and probably does not need any designer clothes at all. We never bought them designer anything until they were in junior high, and then it was "pre-worn" most of the time. I do not think he needs an air conditioner, either. We still do not own one ourselves.
You should get a job, though, unless you are planning on staying home just in the summer to avoid paying child care, which can be very costly. You will have to come to some sort of compromise on the spending with her. Seems you two have two different philosophies there. Am I correct?