When I had my first baby almost 4 years ago (that is crazy, where did the time go?), I had a friend who encouraged me to try making baby food. This sounded very Martha Stewart-esque, and seeing that I aspire to be a domestic goddess, I thought I would try it. I loved it, and found it to be a very healthy and economic way to feed my babies.
I used a great resource to help in my culinary pursuits called Mommy Made and Daddy Too! by Martha and David Kimmel. I loved this book because it is a great starter book to teach you how to make simple purees. Basically I would buy fresh fruits and veggies, cook them (if necessary) and stick them in the food processor or blender with some water. It is truly as easy as that. Then I would serve what I wanted and freeze the rest for another meal. I found that pouring the purees into an ice cube tray made good sized portions for a baby. The economical thing is that a small amount of produce makes several servings of baby food.
This book also gives you good ideas for mixing purees together. So I would pop out and apple cube and a squash cube and mix it up for some variety. Another very helpful section gives you a chart for when to introduce various foods including grains and meats. I know there are lots of other great books out there, so feel free to let me know what worked for you with a comment.
With baby number 2, I got a bit lazier (poor baby no. twos of the world, they always get the shaft) and sometimes just pureed whatever veggie we were eating that night or smooshed it up with a fork. The benefit to this is that she was eating table food much earlier that baby number 1 which also saves on money.
I have found that once a child is ready for stage 3 baby food, they can pretty much eat most things you are eating if it is softened and smooshed a bit. I also believe those meals made for toddlers are a bit of a waste of money, unless you are buying them for convience sake. At about 9 months old, our youngest was eating what we ate. Sometimes, I swear she can out eat us.
For other frugal tips, check out Biblical Womanhood.