I have a 7 month old son whom I LOVE being home with! I cut LOTS of corners to make that possible.
Among them:
1) Cloth diapers and wipes: You don't have to invest in an expensive diaper stash. I mainly use prefolds or flats fastened with a snappi and then a Dappi cover. Dappi covers are only a couple bucks apiece and I find they work really well. I've even repurposed my excess of receiving blankets as flat diapers. For cloth wipes, you can literally use regular wash cloths. I soak them in a home made solution in an old wipes container. Also, a friend found some nice fitteds at Goodwill for me, as well a couple nice diaper covers. Honestly, I've cloth diapered son on 2 road trips, and found it fairly easy. I don't miss buying disposable diapers and wipes.
2) Breastfeed: I can't think of anything more affordable or convenient.
3) We canceled cable: It was expensive and we never watched it. We got Netflix, instead, for $8.99 a month. DH is in movie heaven! And I love having all the documentaries at my disposal.
4) Ooma: I haven't gotten this yet, but I plan to in a few months. I've heard great things about it. The idea is you buy the equipment for a couple hundred dollars and then you never pay to use your phone again. That's one bill I can't wait to cut!
5) Clean with Baking Soda and Vinegar. Chemicals are just bad and natural cleaners can be expensive.
6) Make your own laundry detergent. Hang to dry. (If you don't like how "stiff" the clothes feel, you can pop them in the dryer for a few minutes. You'll still save a ton!)
7) In the Kitchen: Cook from scratch, including making your own broth from vegetable scraps, baking your own bread, cooking and freezing beans instead of buying them canned, make and freeze your own pie crust and pizza dough. Shop at ethnic markets for the best price on spices and produce. Also, if you can't find a particular spice at an ethnic market, go to any drug store for cheap spices. Shop loss leaders. Buy frozen vegetables when fresh produce is expensive. Of course, grow your own food if you are able to. Meal planning is essential. Soups go a long way, as do casseroles. Beans and rice are cheap, as well as extremely versatile. Double favorite recipes and freeze half of them for busy days when you don't have time to cook.
8) Second hand all the way when it comes to babe. Seriously, family and friends pass down clothes to us all the time. We've bought one outfit since he was born--for a special occasion. All of his toys were either passed down to us or bought at church/yard sales. He doesn't know the difference and loves them all.
9) Don't skimp out on the fun! Seriously, there are so many free and frugal things to do! Check out your local library for museum passes! You'll find passes to zoos, science museums, art museums, history museums, etc. We recently visited a wildlife refuge. The explorations are seemingly endless. We go to a museum every week or two. Many of the passes are for free entry. Others are deeply discounted. Check out movies from your library. Read your favorite magazines for free. Our local library shows a movie every week during the summer. Plus the library has story time and craft time. Utilize interlibrary loans for items your local library may not have. Also, local movie theaters show free movies during the summer. Be active! Walk trails as a family. Have picnics (indoor ones on rainy days). Attend festivals. Play games. Read together.
10) When babe is old enough, swap babysitting with trusted friends so you and partner can go out (or stay in

). You won't have to pay a baby sitter and you'll still have date night!
ETA:
11) Organize a clothing/toy swap with other families. This is great for babies and children, but also for parents, as well.