There are many types of bedding and litter on the market for rats and mice and many of them are very good. But first, a warning about the bad stuff. Pine shavings and cedar shavings are a big NO NO! The oils contained in these types of wood are toxic to rats and may cause them to have respiratory infections and difficult breathing.
Sadly many pet shops recommend the use of these two products, and many first-time rat owners innocently buy it because they get a lot for a little money and it smells good. But please do not let this persuade you into buying it. It could mean your pet's life.
Beddings and litters that are highly recommended are easy to find and fairly cheap: Gentle Touch aspen pellets (pictured at the right), CareFresh, Yesterday's News, Cell-Sorb Plus, Aspen shavings, Biocatolet, and many others. Just be sure there is no pine or cedar and not too much dust to irritate the lungs.
Another alternative is to use cloth bedding that is washable. Jay-cloth is popular for a cloth bedding. There are no threads to catch rattie toes, they can be washed and re-used, and are relatively cheap.
Old t-shirts, sweatshirts, shorts, etc can also be used as blankets.Just be sure they have no loosely-woven threads that may get wrapped around toes or other appendages.