I do both: buy and use stuff around the house. Our crafts are often spurred by books and ideas we see in magazines so we will see what we have around to create something similar.
We certainly don't spend a lot of money on crafts. I homeschool my kids and tend to buy some basic supplies at the beginning of the school year to have on hand.
Other than that, my daughter is forever making up crafts with what we have on hand. Just yesterday she made a really cool Easter bunny out of loops of paper. Had a carrot and everything
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