My best advice to anyone wanting/needing to cut back on expenses, but not on gift giving, is to play up your talents and think creatively.
I love to cook, so food is one of the ways I give gifts to people. Because people are so inundated at Christmas with sweets, I do something different; I bake bread. My bread is always greeted enthusiastically. I've also done this as thank-you gifts for my husband's co-workers when they went above and beyond to help him on a project. Lovely packaging always helps with the presentation.
Another consumable gift I enjoy giving is spices. We have a fabulous spice store in Fort Worth called Pendery's World of Spices. I am in love with their stuff, especially their fajita seasoning. Their selection of chili powders is vast. Local spices make great gifts for people far away, but also for locals who are unfamiliar with this store. Bags of spices are fairly inexpensive, and they're always well received.
I've been honing my sewing skills over the past year. I'm still very much a beginner, but I sew well enough to make a few gifts. Recently, I gave wedding gifts of homemade dishtowels that I packaged up with a cookbook and a nice wooden spoon. I made a stuffed cat for my youngest niece for Christmas. Both projects were minimal in cost, but did take time to make.
I enjoy paper crafts, so my homemade notecards make lovely gifts for the women in my life. Lately, I've been enjoying doctoring up composition books, and I'm thinking that prayer journals might make for some nice gifts.
Even homemade ornaments can make nice small gifts for people.
We work with the youth at our church, so we receive a lot of graduation announcements. Multiple graduation gifts can become costly, but this year I found a creative and inexpensive solution with a lot of meaning behind it. The girls we gave them to loved them.
Need a creative birthday gift for the person who has everything? Try a magazine from the month and year of his or her birth. I've done this a few times, and the recipients have told me how much they enjoyed looking through them and seeing what was popular or of importance when they were born. Make sure the magazine's general topic is of interest to the recipient. You can find old magazines on Ebay or at used book stores for very little money.
Don't be afraid to give gifts that you bought on sale or clearance. The recipient never has to know just how little money you spent on something! Just make sure that the gift is something the recipient will actually like, not just something cheap so you'll have a gift in hand. It's my belief that it's better to give nothing, than to give a thoughtless gift.
Your talents may be vastly different from mine. The key is to figure out what you're good at, what the recipients would like, and be creative. And remember, Henry Wadsworth Longfellow had it right when he said:
Give what you have. To someone, it may be better than you dare to think.
Later Today: What I Don't Do