I've decided to eliminate paper towels from our house. This is a big deal for me. I am an extremely germ-a-phobic person. I LOVE paper towels because they go in the trash and take the bacteria they wiped up with them. In general I am a big fan of disposable products for this reason - I don't like smearing bacteria all over my house as I clean. But, I've decided that our budget needs some trimming and so it's time for me to get over this paranoia. I cut several shirts that had stains, bleach marks, holes etc. into rags (I am extremely accident prone and unfortunately have lots of clothes that fall into this category). We used them all last week to clean up the kids after meals, wipe up counters and stove tops etc. and they've worked great. They're not very absorbent so they don't clean up the every meal occurrence of milk spills, but that's o.k. They haven't really added to my laundry load either - they just seem to fit in with all of the other towels and sponges that I'm washing each week anyways.
We've also switched over to using cloth napkins. I happened to have some that I got when I was single and threw lots of dinner parties. But, if you didn't have any you could make some very inexpensively by purchasing table cloths from thrift stores and sewing under the edges. Again, these don't seem to have increased my laundry load either - I still do all the towels, sponges and rags in one load once a week. I think that these 2 things are really going to save us a lot of money in the long run.
One other thing that we've done for a while that also helps save money is re-use the produce bags from the grocery store. I got this idea from my wonderful mom. We mainly use them instead of saran wrap to cover up bowls and plates of food. They work great and it's also a way to reduce and reuse so that we can decrease our garbage output. I have to admit that none of these changes were made in an effort to be more environmentally friendly - that's just an added perk.