Okay. Let's say for starters that your making a really cheasy and gory horror movie. When thinking about special effects, you never want to here the words: Low Budget. And if you're a regular guy making cool movies, lots of money isn't really an option. But there is hope. My favorite holiday, not just because you get to scare the shit out of people for fun, is Halloween. The number one reason is effects.
Go to any dollar store around Halloween and you will find heaven. There is one place where I live where you can get blood and knife and bodily limbs, cheap. Stock up on that stuff. Spend as much money as you can. You'll have enough blood and guts to make a movie that rivals Hellraiser. The next part is how to use them. Now here's a list of all the props and prices I used in my last flick, Bloodpane. You might not be able to get all the thimgs I did but this is just an example:
5 tubes of Fake Blood $5.00
1 fake Axe $1.00
1 fake Arm $6.45
7 Blood Capsules $2.50
1 fake Knife $1.00
Guts $8.00

In one scene, a guy gets his arm chopped off. So what we did was, I filmed the guy with the axe coming towards the other guy on the porch. The murderer raised the axe and I stopped recording. I changed my angle and took a full body shot of the killer from behind. In this shot you get to see him swing own with the axe. The audience now knows that the axe has hit the victim. This means we now show them what the axe did. I return to my frist angle and we bring on the fake arm. In the shot from behind, the audiance doesn't see the axe actually connect with the arm because that part is hidden by the killer's body. All they see is the axe swooping down. This is good because you don't actually have to show the weapon hitting it's mark. All you have to do is show the axe moving and the arm falling off. It works.
Our victim holds the arm with the end that is covered in blood to his shoulder that is also covered in blood. His real arm is tucked inside his shirt. When I yell action, he starts yelling and quickly drops the arm. It looks cool. I dolly forward and around in a swoshing effect to add to the scene. -Erik