Yes, I am going to talk about Christmas in October :).
Similar to our envelope system, we save money throughout the year for Christmas gifts. We both come from decent sized families, so we usually have around twenty gifts to buy, and that's just for parents, siblings, neices, nephews, and a few others. We try to set a budget of between $20-$30 per person, but occasionally it varies. With this budget, if we set a goal of $25 per person, it usually works out.
How do we do this? I think this is one of the easiest money saving things we do- $25 gets taken out of my paycheck each pay and direct deposited into a separate savings account a our credit union. I don't have to do a thing. By the time October rolls around (that is when I really start shopping), I have $650 for gifts. This is plenty of money for all our recipients, any smaller/homemade gifts, and for Scott, Rowan, and myself.
For the last two years, this process is how we have managed Christmas gifts, and I am really proud of how well we do.
This year I have already purchased gifts for nine people on our list, and it sure feels great to pay cash!