Amy discusses baby formula savings on page 21 of The Complete Tightwad Gazette. I suggest breastfeeding if at all possible. However, I realize that there are circumstances under which this is not possible.
When my daughters were babies, we used a combination of feeding methods. I did not breastfeed Skye at all, but I did breast feed Zowie for a couple of months.
I used WIC vouchers, which paid for a lot of the formula, and when that ran out each week we used a homemade version: Half evaporated milk and half water with a little Karo syrup to make sure that the babies did not end up constipated.
I took them off formula as soon as it was possible.
When I did purchase formula with my own money, I used coupons.
Skye and Zowie did fine with this combination of feeding methods.