The recession has meant that Cynthia Shoss is passing down family heirlooms—and the stories that go with them—earlier than she’d planned. For Cynthia, an attorney in New York City and mother to Lucy, 20, sharing family lore is a priceless gift. “Lucy lost one grandmother three years ago, and the other is in her late eighties,” Cynthia says. “It’s important that she hear the family stories while someone who can still tell them is able to do so.” For the past two years, Lucy has received special Christmas and birth day gifts: Grandma’s favorite book, a piece of antique jewelry, a small painting. “These presents cost nothing,” says Cynthia, “but they’re the most treasured by Lucy.” As the recession lingers, many families are thinking of creative ways to give gifts this year in order to trim their holiday tab. On average, a family spends $1,000 a year on holiday gifts, according to the American Consumer Credit Council. A little planning ahead, though, can mean saving money without feeling like Scrooge.

Set limits

Mindy Troge sets a holiday gift budget and sticks to it. She pays careful attention to money spent on extras, like cards and fancy wrapping. An elementary school teaching assistant in Stormville, NY, and mother to Kayleigh, 14, and Ian, 10, Mindy hasn’t reduced the amount of money she spends on gifts, but “I’ve found that an awful lot of money is wasted on pretty wrapping paper, ribbons and bows, and that’s what I’ve cut out.” Instead, she covers presents with brown mailing paper and has her kids use stamps, paint or silver and gold Sharpies to decorate them. Her advice: “Skip the fancy bows, pretty as they may look. They only end up in the garbage.”

Shop in new places

Holiday shopping doesn’t need to happen at department stores, says Trish Elker. She’s found yard sales to be ideal spots for finding treasures at a fraction of their original price. “I’ve gone to yard sales since my college-age children were little,” says Trish, an independent contractor in Warminster, PA, and mother to PJ, 22, and Kelli, 21. “My kids always seemed to have gotten more gifts this way, but I knew I spent less.” Though her children didn’t get the hottest toys and coolest clothes, that never seemed to bother them. “Holidays are from the heart,” Trish says. “Sometimes a warm wish and an offer to do something are better than a gift for the sake of giving a gift.”

Think outside the gift box

If your family enjoys crafts and special projects, encourage your children to make gifts for certain relatives. That’s what Terry Purdie did, with great results. In fact, what started as money-saving ideas are now beloved family traditions. The whole family joins in to try to become more creative each year. “When my kids were age ten and under, I asked them to pick one craft, and we’d give aunts and uncles a customized version of the project,” says Terry, president and CEO of J. Milan Skin Therapy in Knightdale, NC, and mother to Micah, 24, Marcus, 21, Jasmine, 18, and Jordan, 13. One year they made soap, picking a different shape, color and fragrance for each person. Another year they custom-designed stationery, complete with letterhead, graphics and matching envelopes, “based on the aunt’s or uncle’s personality.” Other favorites were home-baked cookies presented in decorative tins. Terry herself makes gift bags for her siblings that include small items that match their interests. “One of my sisters likes Starbucks, so her gift bag contained a five-dollar gift card, a tall coffee mug and gloves,” she says. Another year Terry bought manicure and pedicure kits for everyone: “They’re always needed, and I packaged them in cute bags. My family loved them.” Her mother came up with a “gift box” idea for her five girls that’s become very popular over the years: They all draw numbers, and the gifts are distributed accordingly. “These are little knickknacks, like fingernail polish, aluminum foil, kitchen towels or barbecue sauce,” Trish says. “We absolutely love it.” The year her mother said she wasn’t going to do the gift box, the sisters almost cried. “It became such a big deal that we now have a grab box for the guys and small grandchildren, too.”

Play reindeer games

If you have a large extended family, games such as Secret Santa can solve a lot of challenges. This option works for Donna Collins, one of seven siblings, who are all married with children. “We draw a name from a hat, and that’s the person we shop for,” says Donna, an oncology research nurse in Palo Alto, CA, and mom to Kathryn, 8, and Lauren, 6. “We set a fifty-dollar limit for gifts, and we encourage those with means to choose a charity we can donate to. It’s a great way to keep in mind the true spirit of the holidays.” For Eileen Hillock’s family, a game of Greedy Grab turned into a welcome tradition. Eileen, an executive director at Morgan Stanley Smith Barney Risk Management in Jersey City, NJ, oversees the game for 15 cousins, age 15 and under. “Each cousin picks a name and buys for that cousin,” she says. “Of course, they always switch with each other for their favorite. The kids know far better than the adults what to buy, and they get a kick out of shopping.” Eileen also creates inexpensive holiday photo albums for extended family, compiling pictures of the year’s events—“like an annual yearbook.” Picture that for a perfect present!

TIP Nix department stores for tag sales. You can find true treasures for lots less cash.