I am looking for the cheapest way to do tokens for characters and grid paper. What are some ways you guys have played that work for you? Right now I am looking at using grid paper from a notebook. 

Cheapest long term is buy a mat with a 1” grid on it. It costs more up front, but it will last for years. For tokens anything will work, even a bunch of extra dice. 

I was already thinking about getting one of those 20$ inch grids. Seems like that might be the way to go. 

Paizo flip mat. I have one that is hexes on one side and grid on the other, but I can't find a link to it.

You can find on amazon one with grid on both sides for like $12.

For tokens, I use anything from figures from other games, to dice, to just drawing on the mat.

This reddit thread has some good information for minis too

I have a vinyl/wet erase gaming map and access to a foldable dry-erase board both have 1" squares on one side and hexes on the other.  I like the dry-erase version much better.

While I have a couple sets of Paizo Pawns, for monsters my first go-to is actually the pawns from a Sorry! game.  They are about the right size, and different colors, which is handy.  Dice, buttons, pennies, etc. are other options that are cheap to free.

I use small hair ties for condition markers (like concentration, poisoned, etc.); I've heard that some of the ones Matt Mercer uses are actually the rings from pop bottles:  the bottom part of the cap that separates when you twist it to open.

I bought a pack of 5 pads of A0 2cm gridded flipchart paper, each pad 50 sheets. It's great because not only can I prep multiple maps, but I can also tea/coffee stain it to give it that parchment look.

I use printableheroes.com for monsters and magic chart film as grid paper. It is awesome and reusable if you use whiteboard markers, and it stick to any surface. But the best part is that you can print paper maps, and cut them out. They will stick to the gridpaper which makes it easy to reveal rooms as your PCs explore them. 

they can be a little pricy but you get 25arcs in one package :) 

Do you have a link?

He gave website, just copy and paste into your URL bar, and you're done.

As a fall back we just used a ruler for when we did not have grid paper. This actually gives a better range vs square grids when measuring diagonals. Its not as quick as a hex map though.

Chessex makes a double sided vinyl mat with 1" squares on one side and 1" hexes on the other. They use overhead projection / wet erase markers. It should cost around $20. Paizo sells them from its store.

Otherwise wide-ruled graph paper.

If you happen to have spare wrapping paper (like for presents), check the backside. They often have 1-inch grids on the back.