Would this be a good idea for motivation?

I'd not waste the money, instead invest in something like a jar and put away money for every milestone reached, say 5-10lbs lost. As you save up the money, create a list of items you can buy with the money as a reward for losing the weight. You may not get to the goal of a size 5 in jeans, you could, you never know. I'm 127 and wear a size four/five and it's a bit lose on me and I'm 5'4 and an hourglass/pear so it really just depends. Your body may not get down to that weight because you've gotten older and your hormones have properly "womanized" for lack of a better term so your hips have widened a bit and you aren't the same as you were ten years ago.

I'd say on top of the jar, make a list of motivators for you and a list of goals. On my wall I have a list of goals such as: lower body fat% to 19-22, lower weight to 118-125lbs, be more healthful in all daily activities, drink more water, exercise daily, etc.

Find things that motivate you and don't use a material item like pants that may never fit.

I personally find something like 'skinny clothes' to be a real turn off when it comes to motivation, as they make my goal seem so much further away. What I do instead is to pick a goal for milestones (usually every 10kg) and buy my goal prize at the start. It then goes straight to my partner who gets told I am only allowed it when I reach my goal. At the moment my hair is in bad need of re dyeing, and I only get my bleach and dye from my partner when I reach 80kg.

TRhis also allows me to work around things financially. I can buy my 'prize' when I have money spare, and don't have to wait when I hit my goal because potentially it's still a week till pay day and I have too many bills to pay

I think you should wait - you don't know how your body will look in those jeans when you reach your goal, there might be some other kind of sexy clothes you want then! When I started to get closer to my goal, I wrote down a list of rewards that I would treat myself for each mini-goal. Because I was only 8kg away it was happening very slowly (1kg per month) and I was losing motivation so I decided to treat myself with each kilo lost! It's something like this:
60kg - new lipstick -achieved
59kg - cheese and wine tasting (with a friend for her birthday) - achieved
58kg - new video game
57kg - haircut at toni & guy
56kg - new bra and undies
55kg - $100 spending spree on clothes
54kg - new tattoo!

I'm a student so I don't have heaps of money but I've been saving since I don't spend as much on restaurants or booze anymore

Everyone is motivated by different things. Whether it's a good idea or not is up to you. If it helps motivate you then why not?

A lot of people on here say to throw your fat clothes away so that you can't go back to them. I find that keeping my fat clothes is motivation for me because I can see how much smaller I am in them. Some people probably get the same motivation from buying small clothes.

I'd say go buy your jeans from a thrift store and save 30 bucks, but there is a downside. You might get a pair from 20 years ago, when a size 5 was more like a size 0 today.

But if you want to hit up the thrift store and buy jeans in various sizes, starting with a size you can squeeze into and zip but not wear comfortably, that might be a good idea. It helps to have goals all along the way, as has already been said.

My cupboard is full of 'skinny clothes' and for me it hasn't proved to be a motivation.

The opposite in fact has helped - keeping an item of clothing at my highest weight and using it as a measurement of how far I've come.

but you need to find something that works for you

all the best!