If you enjoy knitting, crocheting or other crafts that involve yarn but are hesitant to buy a lot because of the prices, here's good news. You can make your own yarn. Probably the most popular is "plarn," so called because it's "yarn" made from plastic bags or sheets of plastic. Another popular "yarn" is called "tarn" (I didn't make up these names, believe me...). Tarn is strips of tshirts or other machine knitted material, cut and pulled so that it rolls.
Then there's the more traditional way of making yarn: Spinning it. You don't need an expensive spinning wheel or even a drop spindle to create bits of yarn from whatever you have: Your own hair, sheep, goat, rabbit, dryer lint... anything that can be drawn out and twisted upon itself. Granted, you probably won't be able to make a sweater from dryer lint, but it's a fun idea to play with.
To make yarn without a tool of any kind, simply pull and bunch the material until it's more or less uniform and in a longish shape. Take the end and twist as tightly as you can, then find something to tie it to, like the spindle that holds thread on a sewing maching. Handle the piece gently and keep on twisting, backing away from the length slowly as it forms. You can add more as you go. That's the basic idea of spinning. It takes a little while to get comfortable with it and by that time, you're probably wishing for at least a drop spindle. They're easy to make and cheap to buy, so go looking and get yourself one!
Now, back to plarn and tarn. Here's a Youtube tutorial Inot mine) on how to cut bags that would take another hour to write out. The concept isn't nearly as hard as it may seem at first; http://www.youtube.com/watch?v=q4gJSR4RtDw
You can use this same method to cut tshirts into tarn. If you don't want to waste the top of the tshirt, cut it into individual strips then sew them to together. Put two strips at right angles and sew a diagonal seam across them, then trim off the excess. This will make a more or less smooth joining. With tarn, pull the material strips slightly so that the edges curl in on themselves.
Now... what are you going to make? Bags, baskets, rugs, slippers? You could even make a jacket and all for free. What's more frugal than that?