A few years ago, my adult family (6 of us) started to do a gift exchange where you draw names and get that person 1 big gift, and everyone else a small gift. Although still expensive, it did cut back on how much we spent on each other and it was nice how, if I wasn't sure what to get my person, I could get ideas from everyone else because they weren't getting him anything big.
Last year, we cut it back and I asked if we could step out of the exchange. I filled stockings for my parents, because they spend Christmas morning with us and I could fill them with freebies I got couponing. My sister sent us a gift, which was really nice of her, but she said that she knew she wasn't getting one back and that was OK with her. We do give to the kids, but kids at young ages can be happy with a low-cost gift.
I did a really good job at finding awesome gifts for the kids in our lives at low prices last year, by keeping my eyes peeled for them from August to December. The problem last year was that I spent the entire amount budgeted -- instead of stopping at the awesome deal (say, buying a $25 toy for $10), I then spent $15 more. This year, when I get an awesome deal, I'm stopping and not spending the rest of the budgeted amount. Or, you could look at it from the perspective that I'm budgeting less $$ per kid.
My dad loves used books, so I can usually find something good for him at a library booksale ($1 each!) or on paperback swap. On Paperback Swap, I ask the sender if the book is in "gifting condition."
If you're going to buy gifts for the holidays, it's best to start your list now and keep you eyes peeled for the fabulous deals, or go to the booksales / consignment sales / etc. that happen in the fall.