How to connect my TV to speakers?

First time poster… Really need some help.

So i just bought a Samsung LCD 32" TV (LN32D403e4d i think), which only has an optical output. All other ports are inputs. The internal speakers stink, so I wanted to connect them to some external 5.1 speakers. I think these would work:
http://www.amazon.com/...003VAK1FA/

I'm a college kid, so i want to do this as cheaply as possible. I don't want to have to buy an A/V receiver or home theater system because that is out of my price range. Also, i'd like for the speakers to work for my computer and iPhone too.

My theory is to get the TV to convert its digital to analog using this converter:
http://www.amazon.com/...005K2TXMO/

Then, using an RCA male to 3.5 mm female converter (see link), I could plug the 3.5 mm male cord from the speakers into it:
http://www.amazon.com/...0002GUBIS/

This way, when I want to listen to my phone or computer, I can just unplug the 3.5 mm cable and plug it into said device.

Please let me know if you think this will work? It'll cost me about $100, which is far better than buying a complete home theater system. Please Please Please I need some help!

Yes that will work however if you want true 5.1 surround sound from your TV then you will need a different digital to analog converter. This one is supposed to take the digital audio and give you 5.1 analog output. If you look at the pictures it even has the three 3.5mm jacks for your speakers.

http://www.amazon.com/...0057UNPVO/

If you are looking to use 5.1 speakers with the toslink, you would want an optical to 5.1 converter like this one: http://sewelldirect.com/Sewell-51-DTSDolby-Digital-to-Analog-Converter-35mm-Output.asp

The converter you linked to on amazon converted it to a stereo (2.0) sound. It would downgrade the signal to only two channels. The setup you have would work, but the speakers would come with 3 of the 3.5mm connections (I have a similar speaker setup for my computer).To have all the channels, you would want an optical to 5.1 converter.

In a perfect world, I would still recommend an amp/receiver. But I know what it is like to have a tight budget. This will get the job done. Best of luck to you!