If money is really tight you can even use the best parts of a worn beach towel, bath towel or blanket. My grandma and mom used to use anything they had. Also used baby receiving blankets are good too. As long as they've been washed there won't be any shrinkage and they're very washable.
If you use a towel cut away the part about 3 inches in from the end where that "ribbing" is. You don't want to use that.