Step Two: Make your own baby food. Most likely you have a food processor. It is your friend. Use it. All I needed to purchase were the whole foods or frozen fruits/veggies and a couple of ice cube trays. For example, cooking and pureeing two medium sweet potatoes filled an entire ice cube tray. Figure that the sweet potatoes cost around $1.67 and the ice cube trays (if you had to buy them) went around $1.50 Each tray holds 16 ice cubes so each serving of sweet potatoes costs 20 cents. Compare that with the upwards of 50 cents you'll pay per jar of commercial stuff and the savings add up quick. Bonus: by buying more fresh and frozen fruits and veggies for your baby, you'll inevitably start serving more to the rest of the family setting strong eating habits in place for years to come.
Step Three: Reuse as much as possible. Since we didn't find out the sex of our first child, all of our baby gear was gender neutral. The nursery was light blue and the onesies/sleepers were as unisex as we could find them. So when our son was born this past August, we were able to reuse all of our baby gear from Noelle's infancy and just update the nursery with a new border and crib sheet set. We kept the nursery furniture in the nursery and bought new furniture for Noelle's room which was significantly less expensive then nursery furniture.
Step Four: Hand me downs are your friend. We were able to get all of Noah's clothes from what my nephews had outgrown. Of course, he is as big as his twin cousins now so the flow of clothes has trickled to a stop but for the newborn stages, it was wonderful. You can also visit consignment shops for clothes which require clothes to be stain-free and not 'worn' for less than half the price of new clothes. Which they will outgrow in a matter of weeks.
Step Five: Child care. We were very fortunate that my MIL had retired and we were able to hire her to watch Noah saving us 2/3 of the cost of an Infant tuition. We did opt to keep Noelle in school as she had moved to the preschool class and the benefit to her far outweighed the actual cost of her full time tuition. Though we may drop her back to only 3 days a week which could be another $150/month saved. However, we were prepared to shift work schedules or drop to a single income if need be. Because these guys? Are totally worth it.