Firstly, make sure you get along to any car boot/garage/yard/tag sales in your area, looking out for baskets that you can package gifts in, pretty china, toys in excellent condition with all the pieces present, inexpensive hand made crafts and second hand books that look brand new.

Also keep an eye open for children's videos and puzzles - count the pieces, board games - check the contents, and potted up houseplant cuttings that you can grow on and put into a pretty pot. Don't worry too much about toys for tinies being boxed - they won't mind if it's wrapped in gift paper as long as all the bits are there.

Baskets can be washed in warm water and dried outside or in the airing cupboard, then filled with items especially chosen for the person you're giving to.

For example, for a friend who loves sewing, make up a patchwork basket, containing a template for the shapes, ready cut squares or hexagons of fabric, threads, needles, pincushion or scissors.

Two mugs, special tea bags, mini pots of honey and marmalade make a breakfast basket, similarly mugs, sachets of hot chocolate, and a lavender sachet to aid peaceful sleep make a goodnight basket. 

Crumple tissue paper into the basket first, then arrange the items prettily before covering with cellophane and tying with crinkly ribbon and gift bows.

A variation on this theme is a gardener's flower pot. Half fill a flowerpot with crumpled paper or straw. Arrange packets of seeds, inexpensive hand trowel/fork, plant labels/ties, notebook, green string and budget gardening book or magazine. 

Haunt the cut price shops for presents that may just need some creative pairing with another inexpensive item to make a lovely gift.

Consider pairing:

• A scented candle and bubble bath
• Recipe book and mixing bowl or cookery utensils
• Joke book and whoopee cushion
• Video, cola and popcorn
• Pack of cards and six pack of lager/beer
• Paperback book and box of chocolates
• Houseplant and plant care guide
• Calendar and diary
• Hair scrunchies and hairbrush or shampoo
• Disposable camera or film and photo album

Once you start thinking along these lines you'll probably come up with lots more ideas of your own.

Use the skills you have to make presents. If you can cook make cakes, cookies or fudge. If you can sew make frilled cushion covers to match your friend's room scheme from remnants of fabric. If you can arrange flowers fix a piece of florist's foam to a piece of bark or charity shop shallow bowl and make a Christmas arrangement with berries, cones and foliage that you can pick up for free.

Grandparents are usually more than happy to receive framed photographs of their precious grandchildren - the collage type are often particularly welcome.

Or what about printing out an inspirational piece of poetry or prose such as Desiderata in an antique type font. Paint it with a solution of tea to "age" it a little and frame it for an unusual gift.

Help to pack out your own children's stockings by making a whole videotape of their favorite television programs, icing cookies with their initials and making up little craft boxes containing paper, glue, sticky shapes, oddments of wool for hair and felt cut into shapes for eyes, mouths, noses etc.

Finally if you have no cash at all write or print out some gift vouchers offering your time for babysitting, housework, gardening, decorating, car washing - whatever you can manage. You will be surprised at how well they will be received. 

And remember none of your friends or family would want you to go without essentials or get into debt just to give them a present.

It's very easy to lose sight of this fact as we are seduced by all the advertising hype.