You don't need to spend a lot of money on craft equipment for your kids.
Think before you throw out things.
Pictures from old magazines can be cut out and used for projects such as collage. Another fun project is have the children make up there own face pick a nose off one page eyes for another and so on. Lots of fun laughing!
Raid your sewing box for old buttons, pieces of wool or scrap material. Again, these can be used for collage or cards, and for making bangles, necklaces, or even dolls clothes.
A store cupboard item you can use for crafting with young children is dried pasta such as penne. Help them thread it onto string to make a long necklace or picture.
Make your own play dough. Put 1 cup water, 1 cup flour, 1/2 cup salt, 2 teaspoons cooking oil and 2 teaspoons cream of tartar in a pan. Add a little food coloring and cook gently for a few minutes until the mixture forms a ball. Store in a plastic container.
Lolly or Popsicle sticks, washed and dried, can be made into many interesting objects such as doll's furniture.
Paper plates make great masks. Cut out holes for the eyes and attach a piece of elastic once the plates are painted or drawn on. Halve the plates to make carnival eye masks and attach a Popsicle stick as a handle.
A great place to find free craft materials is outdoors. Nature provides us with a wealth of ideas. In the woods, gather leaves, twigs or bark. An imaginative child will find plenty to do with them. While you're there, give your kids paper and crayons to make tree bark rubbings. See what patterns different trees make.
Flowers can be picked for pressing. You don't need an expensive flower press, just gently wrap the blooms in kitchen roll and place between the pages of an old book. Put it in a warm place such as an airing cupboard, weighted down if it's a paperback, and wait a few days until the flowers are completely dry.
The beach is another good place to gather materials. Small shells can be glued onto plain trinket boxes or picture frames to make highly individual gifts.
Buy cheap glassware and crockery to paint on. Old wallpaper rolls are great for scrap paper and cutting out.