Hi Lauren. It's great to hear from enthusiastic newbies who are keen to embrace the cruising lifestyle. Obviously finances are a restricting factor for most people wanting to buy a boat. The first thing I would say is buy the best boat you possibly can, for CASH. Borrowing money, then having to find more to start fixing, is a self defeating process.
Most boats made in the past 40 years have dunnies and showers, (and refrigeration, hot pressure water etc) so there is no excuse for being stinky. Bigger boats cost bigger bucks both to purchase and maintain. For two people wanting to cruise I suggest something about 36', with a full keel and centre cockpit as being an ideal size and configuration for extended cruising. I had a South Coast 36 (Oz made in 1982) and sometimes wish I hadn't gone bigger. There are many good mediums but GRP is perhaps the best for people who want to go sailing soon and on a budget.
As far as fitting out is concerned. It presents challenges as does any re-modelling project which doesn't feature 90° angles. The biggest impediment to DIY is the belief that it's just a floating apartment. Materials from specialist marine glues, nails, screws and wire, to timbers; and to the physics of design engineering to cope with the stresses placed on an offshore boat are essential inclusions. The knowledge of how to use them is not difficult to learn, but learning is essential.
Now to the good news. Sailing was developed by Cromagnon man. He was not a terribly sophisticated bloke...consequently, sailing is a very easy, largely intuitive thing to do.
So, get yourself down to the water and meet a few sailors at the local boat clubs. Take a few courses in navigation, and sailing (most sailing clubs offer these at fairly low cost) and look for a little sailing/racing activity during the weekends. Avoid skippers who think every Saturday race is The America's Cup, for they will shout like idiots and generally make a bloody nuisance of themselves and will, in all probability, have you thinking a VW bus might be a better bet.
Start looking for a boat. Consider not just the cost of buying and fixing, but also the cost of keeping it either on the hardstand or at a marina. Don't trust your instinct when looking to buy. Falling in love with a boat before you have had it assessed by someone who is qualified to make the assessment, is dangerous.
Above all, please keep us aware of what you are doing, even if it is on an occasional basis. There is a lot of experience here on Cruiser Log. Here you will meet people who have made all the mistakes it is possible to make (and who will want to help prevent you from making the same blunders), people who sail, who want to sail, who have bought junk and have successfully turned that junk into a decent boat....all have good stories to tell which can save you thousands.
Have a look here: http://www.amazon.com/Larry-Pardey/e/B000APR32I
Lyn and Larry Pardey are lifetime cruisers and adventurers who do it on a budget. In particular, I recommend a book called The Cost Conscious Cruiser.
Welcome and stay in touch.