After Christmas morning, my living room is not littered with paper. It's littered with pillowcases and ribbon.
For years, we've avoided purchasing wrapping paper. Although frugality usually tops my reasons for not buying something, this time it has little to do with it. I simply hate wasting that much paper. It literally turns my stomach to see all the garbage (and yes, even piles of recycling) that line our neighborhood street after Christmas. I hate the thought of discarding something that has seen such minimal use.
So every year we get the pillowcases out of the linen closet and dig through a bag of ribbon I found at a yard sale. If an item shows through the pillowcase, we double up the fabric or box it prior to wrapping. If an item is truly too large for a pillowcase (which rarely happens with a low $ limit per family member), we put it in a box or a large popcorn tin (also saved from previous years). For small gifts I reuse wrapping paper we get from packages outside the family. Or we use the old standby, newspaper comics.
It's just as fun to "open" a pillowcase as it is to open paper. Perhaps more fun. You can't hop around in torn wrapping paper after all the gifts are opened! :)