I know some people have nice rags that they buy but I'm cheap so I just use things that we were just going to throw away like old t-shirts, dish towels, washcloths, etc. Every week I do a load of rags (I like to add a splash of bleach to the wash- I am not one to use chemical laden products but I feel the bleach is necessary to get out all of the icky germs) and we are good to go.
With that said, we do occasionally use paper towels and when I say occasionally I mean that one roll can easily last us months. To ensure that we don't use paper towels often, I keep them hidden in the pantry. The rags are easily accessible under the kitchen sink (right next to the cleaner) so by keeping the paper towels in an inconvenient spot it makes us less likely to reach for one.
Have you tried using rags for cleaning? If not, why not try it and see how much money you can save!