You want "TRY" to have the same grade Weapon/Armor as your lvl grade as much as possible. Although it is possible to say use NG grade till mid 30's, or D till low 50's, etc. If you do that though, it's gonna cost you a lot more in SoulsShot/SpiritShot and Potion consumption that you would with a more advanced weapon/armor. In this game, prices are very harsh, grind is harsher, so try and avoid blatant misuse of adena as by the time you'll lvl 35+ and start hunting around Giran, you'll see prices for weapons/items as much as 1billion or more. And no, you don't have 100k's drop when you kill mobs, at lvl 75, you get about 3k adena per mob drop :p
When you equip things out of grade, there is a pretty severe penalty for using out of grade equipment.