Write down what you spent last year (roughly) on things:
Food
Drinks
Presents
Decorations
Outings
Now looks at how you can cut back on each thing.
Food - what do you actually like to eat? Don't spend money on things that won't get eaten, just because it's "festive". Iceland are pretty good for getting things like pigs in blankets etc, and because they're frozen, you only need to cook what you'll eat. As others have said, chicken instead of turkey will be cheaper.
Drinks - if you drink alcohol, can you cut back a bit? Or if you're having guests, ask them to bring a bottle. Again, start looking for deals now.
Presents - cut down as far as you can. Most adults don't need presents, so just agree to not bother (do it now before other people start buying though). We did this a few years ago and we haven't missed it at all. For kids, set a budget and stick to it. Buy second hand from EBay where you can - small kids won't notice or care; older ones you can explain that you were able to get more for your money second-hand. Pick up stocking fillers (if you want them) from now, but keep track of what you spend. Charity shops can be good for things like bath bombs etc; also shops like B&M etc.
If your kids are young, you can buy them things that you'd be getting them anyway - we give ours boxes of their favourite cereal, and it's one of their highlights every year!
Don't bother with buying gift bags etc; unless you can reuse some from last year, it's too expensive. Likewise cards - we just don't do them any more, except for a couple of people who we know really appreciate it.
Decorations - use last year's (we've had the same ones for decades now; we buy the odd new one every now and then, but it's not a major spend).
Outings - do free things, like going into town to see the lights. Church and school fairs often have a Santa for a couple of pounds (in fact, we went to one Church Christmas fair that was amazing: lots of craft, decorating cookies, a free Santa, and a little nativity play that ran every hour or something. The kids adored it and our total spend was less than £5.
Also, think outside the box - our children rarely get the bus, so we take the bus into town to see the lights, and they think it's amazing! Another local church had a Christmas tree festival (free) - just lots of trees decorated by different groups in the local area, and again it was brilliant (cost us about 50p each for drinks and shortbread; absolutely fab!).
With young kids it's fairly easy because they have no expectations and just love lights. If they're older you might need to be more creative, but you have the advantage that you can explain it to them a bit better.