Windows Phone Emulator requires Hyper-V which needs Windows Pro version. That's probably why you aren't able to start your Emulator.
As I've posted in comment, I've heard about VirtualBox and an ability to run WP Emulator on it. Some helpful links: other question on SO, VirtualBox forum, video. I'm not sure how it will work (and if) as I haven't tried this.
IMO I would follow WiredPrairie's comment - upgrade or buy inextensive phone.