Libraries tend to have a lot of good Christmas books that you can borrow, and many also have dvds as well. Have a look in charity shops too for good options for a lot less money. We have a collection gathered over years, which we put away most of the year and take out in early December.
Christmas themed colouring pages and activity sheets are great for reusable advent calendars or just "things to do". There are some great cheap/free craft ideas on the web as well, DLTK and Activity Village are 2 good websites I tend to start out from, and homeschooling ones can be great too for educational sheets which are fun and use a theme.
Walks in woods to look at nature in winter and collect pine cones for crafts are great. Walks in the local area after dark to see houses lit up - or a drive with a flask of hot chocolate and the DCs in PJs!
Lots of councils and other organizations run free or very cheap events - it is not all about spending loads on "experiences". There is a "Live Crib" outside the Lord Mayor's House in our city, and a lot of Choirs come and sing there too, which makes it a great place to wander away from the main shopping street (and coffee shops are cheaper there, and a lot quieter at weekends, despite being only 3 minutes walk from the main shopping street - as it's a slightly more office district). Or just wander the streets to enjoy the lights and atmosphere rather than going into every shop and being pressured into buying loads.
Big box of "stuff" sounds great - maybe add some string, coloured paper or tissue paper, and some actual craft bits if that doesn't blow the budget (a pack of googly eyes, or pipecleaners, or lollipop sticks, or matchsticks etc). Just to help making it more imaginative.
Bottles of bubbles are great in winter - gets them outdoors and moving when the weather is dry but cold.
Board games are a great idea, and having a pack of cards too as there are soooo many things you can do with those.
For the food -
I don't tend to buy tins of biscuits, as we won't eat them, or would eat them all and expand our waistlines. Instead, we buy a few extra packets of biscuits we like (a mix), and open these for when we have visitors. We also probably spend the same or less as a tin of sweets/chocs, by buying a bag of orangettes from Leonidas, and eat far less as a result - they are a real treat for us!
I buy a few 6 packs of cans of coke/7up etc rather than 2l bottles - as we don't tend to drink it all before it goes flat and we drink less anyway when we are opening a can each time rather than the open bottle on the table. And if we don't drink it all at Christmas, it will save in cans for another time which bottles won't.
We actually don't get all that much extra food in over Christmas - yes cheese (we all love cheese), but not groaning fridges spilling out or larders threatening to spill packages everywhere when you open the door. Nice food for the few days, yes, but not gluttony.
I build up my stocks of breadcrumbs (for stuffing etc) from heels of bread in the weeks beforehand and freeze them. We make sure there is freezer space for any leftovers we will have, and only buy what we think we'll eat (that allows for leftovers we want - turkey sandwiches, a particular seasonal gratin dish, and a curry etc - but not so much that we need to throw out food).