Hi, we've worried about Christmas last couple of years as money been annoyingly tight. So charity shops a big help, plus buying things like socks/pyjamas/clothes you would buy anyway and wrapping up to add to pile. Go to your nearest 'posh' area as the stuff in the charity shops will be better (but don't come here as I want it all for mine :) ).
I usually get my parents to skip my pressie and give me the money to boost my budget for the kids.
A good thing for older ones (ours is 8) is to make a voucher for a special day out which can be quite cheap if you pick carefully and spreads cost if you pick something to do in new year.
We also buy things like special pasta/hot choc/nice dried fruit/choc spread/other nice food for stockings as again it pads it out and you would spend some of this cash on food anyway.
We do personal stuff like framed pics of them doing fun things as frames/little photo albums are dead cheap to pick up (obviously these don't come from Father Christmas, he doesn't have time to follow all the kids round all year
).
We give them shared presents for bigger stuff.
We make pressies for relatives like sweets and decorations, I am quite honest about our money situation and don't care if relatives think its small, they are grown ups and can handle the disappointment (except my sister who gets really cross, but that's part of the magic of Christmas in my family, she usually gets grumpy whatever you buy but this way I'm twenty quid up).
Best of luck, I really feel your pain, its another budget Christmas round here this year too.