One frugal motto is Reuse! Reuse! Reuse! So, what can be done with old t-shirts? Here are some new uses:
Pillows: Although I'm sewing impaired, I did manage to make a nice bed pillow for my son out of his favorite t-shirt: the one that says "I'm the big brother." He had worn it well past outgrowing it, with sleeves up to the middle of his arm, and a good deal of belly showing when he lifted those arms. He wouldn't give it up until I had promised to make it into a pillow, so he could "keep it forever." I turned the t-shirt inside out, sewed along the outside edge and left a opening for stuffing. Alternatively, you could probably cut the arms off, or sew them closed, and use a pillow form for stuffing.
Rag rug: Cut the t-shirts into strips and use them for a rag rug. There are many different ways to make a rag rug. One easy way is to sew the strips end to end so you are left with three very long strips. Then, simply braid the strips together as if you would braid hair. sew the braid into a circle or oval.
Dusting and polishing cloths: This one may be a little obvious for the truly frugal, but sometimes we can forget the obvious. The soft t-shirt material is wonderful for dusting and polishing. Just the other day, I saw Martha on TV polishing silver. She was using expensive cotton cloths to get up all of that yucky tarnish. Why? It would probably have been less expensive to buy brand new t-shirts and cut them up, let alone use old ones.