These items can be costly at retail stores. Rarely can you find good deals on them. I have resorted to using twin size sheets with the hopes of using them once my grandchildren graduate to a twin size bed. I can find good deals on twin sheet sets that are usually out for clearance. How do you save on baby or toddler linens?
Your idea is a good one. I was going to suggest making some as well. You could pick up a flat sheet or two on sale and make some fitted infant sheets. All you need is a bit of elastic on the corners, or you can add snaps or buttons and attach strips that go across the underside of the corners to keep them in place. You get a lot of fabric in a flat sheet for a couple bucks, but yeah, keeping them intact to use later as twin sheets is great. You can also make quilts and things from clothing you no longer wear if you sew. Infant and toddler quilts are much easier to make due to their small size. I would also check "gently used" children's resale shops and consignment shops for deals on baby linens.