There's a whole lot of good advice on here and I can go even cheaper for you.
Don't get me wrong, I'm a big advocate of quality gear but I understand going inexpensive while you learn.
This is what I'm teaching my 9-year old to fly fish with:
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Eagle Claw Featherlight 7'0" 5wt - $30- Okuma Sierra 5/6 reel (you should be able to find this for no more than $45)
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Orvis Clearwater Beginner Fly Line - $49A couple things- the rod is fiberglass. Personally, I think this helps a beginning caster because it forces you to slow down and focus on your casting stroke. Plus, you really feel the rod load. You lose some of this with graphite rods. Second, I up-lined the rod to 7wt line. This really exaggerates the rod loading and you can really feel it. But, the rod can handle it. You'll lose some distance but I can easily lay out a 70' cast with it.
Since you're a beginner, I'd recommend using pre-tied tapered leaders. Keep your eyes on Sierra Trading Post as I've bought a ton of leaders I used when pond hopping off of there.
And, believe it or not, but eBay is a pretty good source to find assortments of bass/bream poppers and woolly buggers- which will likely cover about 90% of what you want to throw in neighborhood ponds.