I'm nearly finished with a rag rug made entirely from old pants of mine that had become indecent. (You stich 2-inch-wide strips together into three long strands, and then you braid them together to make a rope, then use carpet thread to stitch it together.)
My mother has taken a bunch of old T-shirts of mine that have outlived their usefulness as T-shirts, and is in the process of making them into a quilt. The quilt, when it is finished, will be something that we can use for years to come to keep ourselves warm.
These are all things we can do fairly cheaply, getting extra use out of things that once we would have thrown into the garbage. In every case mentioned so far, we're getting years of extra use out of the original items by changing what we use them for. If we do a good enough job at them, these can even be gifts with a personal touch for friends and relatives.
Here's a new one I want to try tomorrow: Making patterns and shapes from old crayons. The girls have plenty of these from trips to restaurants, where they routinely give children cheap crayons that break as soon as they're used for more than 30 seconds. I also seem to remember that you can make crayons into candles.
And I have a ton of old socks that I can't use. They have holes, they're stretched out, and they lost their mates, but mostly they have holes in the heels. So, here's an idea I have for those: another quilt, a patchwork that I make myself by sewing the socks together as I go. I don't know if that would be thick enough, or if I'd need bunting or whatever it's called, but as long as the socks are clean, it's not a bad idea. And again, it adds years of life to the material. Or I can get the girls to make sock puppets. Either way, it reduces our waste, makes something useful from something that has lost its usefulness, and it teachs the girl actual skills, unlike most of what passes for crafts these days. ("Let's glue stuff together and color with markers!" Bleah.)
Bit by bit, I want to cut into the trash we produce. A private school I visited Wednesday, one with LEEDS platinum certification, has set the goal of eliminating all trash within three years. Everything on site will be recycled, composted, or reused in some way so that it doesn't end up moldering in a landfill. That's an impressive goal, and one I want to emulate here at the house.
We already recycle plenty, and we compost a great deal too, but I really like the idea of finding crafty ways to turn trash into something that we can use and appreciate for years to come.