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Ultimately, there's only so much that you can upgrade an item, maybe +10 levels, beyond that the costs are just too much even with the savings from Science. Past that point you'll have to switch out for something better to stay relevant. So with companion equipment you'll eventually have to upgrade to something else.
Many weapons are rehashed in Mk2 variety later in the game, with superior stats, but same base mechanics (Light Pistol, Plasma Cutter, Light Assault Rifle, Dead-Eye, Hunting Rifle, etc), so in this case you're provided with straightforward upgrade path.
Most generic (corporate) armor falls into one of 4 categories, and beyond the level tiers, the only difference between them is in the skill bonuses. Just pick whatever fits your playstyle the most, but don't sweat too much over it. The same advice goes for all equipment, really.
Another mistake is to buy non-unique weapons or armor. You see a nifty elite armor better than what you're wearing, you have money so why not. Three minutes later in the next dungeon elite armors start cropping up like mushrooms after a rain, you come out with 4 or 5, only to sell them for peanuts. What a waste buying yours. By the time weapons or armors start showing at vendors, be sure that you will start finding them for free as loot.
So what do you want the money for, anyway? Well, to buy unique weapons that you like, even if only to collect, to buy mods. To tinker #very special# weapons that you use a lot (like old reliable) a couple of times more.