There are a number of inexpensive items that you can practice cutting hair on before you attempt to cut hair for family and friends. It's likely that you have items laying around your house that have the potential to be used. Look through old toys and costumes for items that may be of use to you. The more that you practice, the more experience you gain. Try to avoid cutting your own hair until you're confident with your skills and experience.
Mannequin
Purchase a mannequin or a mannequin head with hair. Part the hair as you would with human hair. Practice longer layered cuts before you go for shorter hairstyles so that you can try a variety of cuts before you cut the hair too short. Purchase mannequin heads from stores that specialize in costumes and props. You can also find mannequin heads online from a variety of retailers.
Wigs
Place wigs on mannequins and cut the wig hair. You can purchase a variety of wigs for low prices from costume shops and retail stores. More expensive wigs are likely to have a better quality of hair that's fuller and more realistic. Look online for deals if you have a tough time finding wigs in your area.
Dolls
Practice cutting hair on dolls. Dolls of all sizes will do for this exercise. Look through old toys that you may have for potential dolls to use before you purchase any. Retail stores are an ideal place to look for dolls, as there's sure to be a large selection at different price points. Choose a variety of dolls so that you can practice with different textures, styles and lengths of hair.
People
Practice your haircutting skills on people. Inform your friends or family members about your level of experience before you decide to practice on them. Make sure to ask people who are likely to be OK with a haircut that may or may not go as planned. Take into account the wishes of the people on whom you're practicing during the haircutting process. Try not to veer from your plans during the haircut without permission.