My DD is 15 months old now and my family is reeeeeeally into Christmas. We love Christmas so much that my lil sis was cheering the early Thanksgiving this year because yay! it means more time to prepare for Christmas!!
I feel like we do a lot of handmade Christmas gifts, "coupons" for fun experiences together, and hanging out with family for old Christmas traditions, so I don't really think of Christmas in our house as super materialistic, despite the enormous pile of presents we always have under the tree. They're just an expression of love and excitement, and everybody knows they're not really the point of the holiday.
For my DD's first real memorable Christmas (she was 4 months old last year), we're planning on doing all our traditions like decorating the tree together, getting the whole family together for Christmas Eve & morning, baking cookies, etc. We probably will not get her a "big" present, as she seems to like toys in inverse proportion to how much they cost...she really likes toys I've put together from assorted junk in the recycle pile, like a plastic lid with holes in it just the right size for poking crayons through (her current favorite). Here is my tentative Christmas list for her:
1. Hairclips & shirts that I will decorate with cats (she's crazy about cats, and loves to dress up "pretty pretty")
2. Books (she loves books, and we are a bookish family)
3. A play kitchen made from junk in the recycle pile and scraps of felt and yarn, if I have time
4. A box of Kleenex (to pull out and make a mess with :) she loooooves them)
5. A bag of Cheerios in the stocking (favorite treat--we have "Cheerio Fridays" at our house so they really are a treat)
6. A packet of stick bindis (she is half Indian and looooooves to dress up with a bindi. They are the mostest "pretty pretty" accessory in her world)
7. Possibly some little homemade puppets, etc. but I might keep them for a trip that's coming up....
8. Magnets made from pictures of cats, babies and family members (she loves magnets)
9. A photo album with pictures of her and other family members, decorated with lots of 3D scrapbooking sticker things to pull off (this will be the biggest hit of all, I'm pretty sure, as she LOVES her baby photo album and always wants to pull everything off the pages)
I guess that sounds like a lot of stuff...but actually I think it's going to cost about $20-$30 total, and a lot of it is homemade. When we were growing up, my family always did "the 12 days of Christmas" and opened a (small) present every morning leading up to Christmas--my mom felt that we appreciated the gifts more that way, because we would play with each one for a whole day instead of getting overwhelmed on Christmas, and it sure kept us occupied. I think we might do that with DD too when she's older. We used to have an advent calendar with an activity ("get tree," "bake cookies") for each day, too, and loved that! So much better than chocolate.