I needed some mod podge for a little project I'm doing, but in my cheapness and laziness I did not feel like going to the store to purchase some. I had seen a post on pinterest awhile back about making it at home, so I decided to try it and see if it worked.
All you need is regular school style white glue (like Elmer's) and a container. Fill the container halfway with your glue and the rest of the way with water. Mix them together and bam! You have mod podge. Easy as that...and much easier than driving to the store.
The homemade mod podge worked fine for my project (that posting to come later), but I'm still not 100% sold on using it for a 'fancier' project. If you're doing basic decoupage or wanting to experiment with it, then go for it. It works great and is a cheap way to learn decoupage. If you're making a fancy project for sale or using heavier or limited (non replaceable) materials, then I may suggest purchasing some. All in all, I found that it worked and would recommend making your own.