Gemara

(R. Zeira citing Rav Huna): One must spend up to a third for Mitzvos.

Question: What does this mean?

Suggestion: One must spend a third of his wealth to fulfil a Mitzvah.

Rejection: It is unreasonable that if he encounters three (expensive) Mitzvos, he must exhaust all his wealth!

Answer (R. Zeira): One must spend an extra third to beautify a Mitzvah.

(Chachamim of Eretz Yisrael, citing R. Zeira): Up to an extra third, one spends his own money to beautify a Mitzvah. Above a third, it is from Hash-m.

Shabbos 133b (Beraisa): "Zeh Keli v'Anvehu" - be beautiful in front of Him with Mitzvos. Make a beautiful Sukah, Lulav, Tzitzis, and a beautiful Sefer Torah written Lishmo in nice ink with a nice quill by an expert scribe, and wrap it in nice silk!

Rishonim

Rif and Rosh (Sukah 16a and 3:12): R. Zeira taught that one must spend an extra third to beautify a Mitzvah. Up to an extra third, he spends his own money a Mitzvah. Above a third, it is from Hash-m.

Rosh: Above a third, it is from Hash-m. I.e., he receives Peros in this world, and the principal is stored for him in the world to come.

Ran (DH ul'Hidur): From the Gemara's question, we infer that even for a Mitzvah Overes (the time to do it will pass) such as Esrog or Sukah, one need not spend more than a third of his money. How can Chachamim limit what one must spend for a Mitzvah Overes?! The Ra'avad says that it is lest people come to poverty. Chachamim taught that it is better to eat on Shabbos like on a weekday than to take from people. Presumably, this is only for an Aseh, but one must forfeit all his money to avoid transgressing a Lav. Everyone should spend according to his means. R. Gamliel spent 1000 Zuz for an Esrog. Above a third is from Hash-m - "borrow on My account, and I will pay."

Rosh (Bava Kama 1:7): We asked 'if he encounters three Mitzvos, will he give all his money?!' This shows that one need not spend so much for one Mitzvah, even a Mitzvah Overes. The Gemara considers it Guzma (extreme) that R. Gamliel, the Nasi, spent 1000 Zuz for an Esrog. Chachamim enacted not to give more than a fifth of one's money to Tzedakah.

Nimukei Yosef (Bava Kama 4a DH Ad): Up to an extra third, one must spend from his own, i.e. if he toiled for his money and his budget is tight. If Hash-m gave him money without toil, he spends more (than an extra third). If not, his life takes precedence. The Ramah says that presumably, if one became rich through toil and he can add more than a third, this is like one who became rich without toil - "He gave to you the ability to prosper."

Yam Shel Shlomo (Bava Kama 1:24): It seems that if one is barely subsisting, he need not add a third. Perhaps he is exempt from the Mitzvah altogether, even if it is Overes, for this is like a fortune for him, except for Ner Chanukah and the four cups of wine.

Poskim

Shulchan Aruch (OC 656:1): If one bought an Esrog minimally Kosher for the Mitzvah, it is a Mitzvah to add up to a third of the price of the first to exchange it for the nicer one.

Darchei Moshe (1): The Ran (this should say Nimukei Yosef) requires one with more than enough for bare essentials to add more than a third. The Ran says that everyone should add according to his means.

Beis Yosef (DH v'Rabbeinu): R. Yerucham (Toldos Adam v'Chavah 13:3) obligates spending up to a 10th of one's wealth (for a Mitzvah). I do not know his source.

Eliyahu Rabah (5): R. Yerucham concludes 'the 10th is like I explained regarding Tzedakah' (Nesiv 19:1; we learn from "Aser A'asrenu").

Mishnah Berurah (8 and Bi'ur Halachah DH Yoser mi'Chomesh): If necessary, one must spend at least a 10th for a Mitzvah. If it is Overes, perhaps he must spend a fifth. The Beis Yosef holds that we cannot learn Mitzvos from Tzedakah. Granted, one need not spend a fortune. It was considered extreme and beyond the letter of the law that R. Gamliel paid 1000 Zuz for an Esrog. We learn from Bava Kama that one need not spend a third. However, perhaps one must spend a fifth or a sixth. We cannot learn a limit of a fifth from Tzedakah, which is not a Mitzvah Overes. Even if there are Aniyim here, others can give to them. Esrog is a Chiyuv on the person himself. The Gemara thought that one must give a third of his wealth for a Mitzvah. It did not challenge this from the 'Isur' to give more than a fifth. Rather, it said 'it is unreasonable that if one encounters three Mitzvos... The Poskim mentioned the law of a fifth here merely to show that Chachamim were concerned lest one become poor and need to take Tzedakah, and we should be concerned here, also. It seems that R. Yerucham learns from Ma'aser that one must spend at least a 10th for Mitzvah, but he does not say that one need not spend more. He said 'like I explained regarding Tzedakah', i.e. that the first year he gives (this portion) from his wealth, and every following year from that year's income.

Beis Yosef (DH Kaneh): Up to a third, he will not be repaid in this world. This world is for doing the Mitzvos, not to be paid for them (Avodah Zarah 3a). Above a third, he will be repaid in this world.

Rema: One who lacks a Lulav or any other Mitzvas Aseh, even if it is Overes, need not spend a great amount for it. One should not give more than a fifth of his money (to Tzedakah). One must give all his money to avoid transgressing a Lav.

Gra (6): One may not even transgress a mid'Rabanan of a mid'Rabanan, e.g. to tell a Nochri to extinguish a fire on Shabbos, to save money.

Mishnah Berurah (9,10): One who does not do an Aseh does not do an act against Hash-m's will. Even if one cannot get a job to support his family unless he transgresses Shabbos, and he will need to beg, it is forbidden.

Kaf ha'Chayim (1): "B'Chol Me'odecha" obligates serving Hash-m with all one's money, i.e. to avoid a Lav. One should not overspend on Mitzvos and impose his needs on the Tzibur. An Oni is like a dead person. It is better to passively omit a Mitzvah, in order that he can fulfill many Mitzvos in place of it.

Kaf ha'Chayim (649:4): The Zohar teaches that one should not bless on a Mitzvah obtained for free.