I remember growing up that we always made a few homemade christmas ornaments. I don't think it was because we were that poor, but rather a fun project with family, and being in camp fire girls we always made stuff there too.
We strung alot of popcorn, and we made those little construction paper garlands, and beads on balls etc.
My mom also made these really cool embelished candles. She would find little glass candle holders shaped like stars and such and pour melted wax in there to form a base. Then put a taper candle in there. Then she would melt parafin and then whip it with a hand blender til it looked fluffy like cream, and then she would put that on the base around bottom of candle and swirl it up to the top of candle. While still warm she would sprinkle glitter on there and then while still warm would stick in little ornaments at the base. We would make these as pairs and then give away as gifts. I haven't made these since then, must try this again-these were really neat.
Looking for some fun links for handmade ornaments:
How to make Christmas garlands:
Raffia - An inexpensive country look garland can be made from strands of raffia (clip raffia to even lengths and tie or wire lengths together). Wire swags onto branches to control the wild raffia look.
Vines - Long natural vines can be used as a garland if they are thin and flexible enough to be worked around the tree.
Chains - Homemade chains of paper strips or ribbon lengths can be made in any size or color you desire.
Popcorn - The old standby of popcorn and cranberry garlands add a homey look to your tree. You'll need to experiment with needles, thread, and popcorn to determine the best method. This project may be better suited to a small tree since stringing 50+ feet of garland for a taller tree may be more than you can do.
Mini Pinecones - Pinecones look wonderful on a tree, especially a country or cabin themed tree. Look for commerically made garlands of mini-cones, or try making your own if you have a source of small pinecones.
Beads - Beaded garlands are a traditional favorite. Buy commerical styles in wood, faux pearls, and artificial cranberry. Or, string your own custom garland with the beads of your choice.
Trimmings - There are many craft and fabric materials that can be creatively used as garland. Look for cording, trimmings, artificial leaf garlands, tassles, upholstery trims, and more.
Twine, Rope - Twist, braid, knot, or loop twine or rope into a special garland. This might be perfect for a nautical tree, a Western themed tree, or a country tree. - Almost any paper decoration can be folded over a piece of twine or cording to make your own garland. Cut shapes out of folded paper, then glue the halves together with the twine encased in the fold. Space evenly on the twine, every 6" or so. Think about using color copies of photos, folded paper snowflakes, construction paper hearts, cardboard cabin shapes, etc
I also found this fun christmas candle link http://www.wikihow.com/Make-Decorative-Candles-for-Christmas
Very cool!! I just found the process for the whipped parafin, but we made our candles like I described above http://www.mormonchic.com/crafty/glittery_snow_candles.asp
So go have some fun and make some Christmas Magic