Costumes are a killer. They can take a huge amount of time and money to produce, and are used for a couple of performances before being discarded. What's the point? How can you produce effective costumes with very little money or time?
Keep it simple: less is definitely more. Most of the time you just need to create an impression or suggestion, as the children's performance will convey who they are. You may find it helpful to find a colour, accessory or motif which sums up the part the child is playing and to work with this. For example, you might think of white for angels, green for elves and red for toy soldiers - obvious but effective. Try thinking traditionally as well - for a nativity, dressing gowns and tea towels will create a lovely retro mood!
Check and see if any there are any costumes from previous years in school. If there are, it is well worth going through these for inspiration and to see if there are any items you can adapt or reuse.
In the run up to Christmas, parents are busy and penniless, so give them plenty of warning if you need them to buy anything. If you keep what you ask for to things like plain T shirts and tights/leggings you are likely to get a good response. For example, if you need a class of soldiers, red t-shirts and black leggings/tracksuit bottoms/tights with the feet cut off, with black card hats, will look just as good as a class dressed in beautifully made military tunics with dress trousers. If you need any specific costumes, ask if any parents have something suitable they could lend.
Look at making accessories such as card hats, crowns or wristbands (you can involve the children in this) to bring your plain costumes to life. Face paint for children who are able to wear it, can also be extremely effective.
Consider printing a motif onto your t-shirts - again the children can be involved in this. Alternatively, you could make a paper or fabric panel which you pin (with safety pins) or tack to the t-shirts.
Most schools have some parents who are willing to help make costumes. Ask for help. (I once made, as requested, 150 card clock wrist, ankle and head bands for my son's reception class, whilst another mum in the class sewed 30 clock tabards! They looked great, but a couple of clocks fewer per child would have looked just as good.) Keep anything you make this year, it may be useful in the future. And if you are making costumes from scratch, keep them as simple as possible so they can be versatile for future years.
A bit of bling works wonders to lift a plain costume - tinsel is cheap and very festive (and great for halos).
Finally, make sure the costumes are comfortable and easy for the children to move about in with nothing scratchy near bare skin.