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Nature.

bucket + [your choice of: sawdust, leaves, dirt, sand, etc.] --> bury it every few days, or chuck it in a dumpster

Animal bedding (pine shavings, essentially) works wonders, and is very inexpensive.

wood pellets, but buy them from the hardware store for a fraction of the price of what the pet store sells them for. Dunno about the horse store.

You're right about getting it from a hardware store, but the bedding is cheaper and works much better than pellets: