When Lindsay and I were still producing plays our budget was pretty much $0. Lindsay wrote for free. I acted for free. And whatever we spent on sets and costumes came right out of our pockets. If that meant we needed $20 for fabric then, hey, the grocery budget was that much smaller that week.
Producing on such a shoestring instilled a love in us for the low-tech.
The Kidsmomo site also posted some photos and instructions for creating tabletop puppetry scenery. All you need is some empty boxes (e.g. cereal, toothpaste), some kraft paper, a black marker, and a little imagination.