Make the Basics

Are you still buying paper napkins?? Why not take some of those old clothes you set aside for rags or donating to make some cloth napkins? It won't cost a thing except a little thread and some of your time. Just cut out squares (size isn't critical) and hem them. Handkerchiefs are the exact same. Just designate which one for which use.

There. You've saved money, storage and even gone a little green.

No more paper towels

Can't live without paper towels? I wonder what your grandmother used?

Some probabilities: Hang up a real towel in your kitchen to dry your hands. Use a dishcloth to swipe up counter top and table messes. Use rags for the floor and anything really messy. Cut up material that's not good for anything else, to use as throwaway rags. (Keep them separate for the really yucky things.)

Second hand decorating

Use second hand sheets and towels to decorate your home. Sheets can be made into curtains, table cloths, pillow cases, slip covers, napkins, dresser scarves... Use towels to cover throw pillows or make curtains, etc.