Allow her to give you a gift. There is no reason you need to give her one...just remember to write a gracious thank you note.
Linda C

In lieu of a gift, how about some special baked goods, fresh from your own oven? Pumpkin bread, ginger cookies, scones, or anything a little different is always a real treat.

I agree with LindaC. As for lunch either go some place cheap or maybe have her over to your house for lunch if your budget won't allow going out. The idea of lunch with a friend is to get together and chat and spend time together. Whether that's in a restaurant or your house shouldn't matter.

I have friends who are on tight budgets, and when they say no going out this month or something like that, we simply make alternate low-cost or no-cost plans. No shame in it, everyone has their own budget and (most)everyone has been on a tight budget so people understand.

I have a group of friends who got into the gift-giving mode. Five of us - and we ended up being obligated to recognize each of our birthdays. Well, I didn't want to do it anymore, not so much for the cost (although that did come into play) but because I had to agonize over what to get them every year. So I recently brought it up, could we quit giving each other gifts? We already do a sort of greed game gift exchange in Dec so we decided to let that suffice. I think everyone was relieved.

You know, some people just love to give gifts. It's not that I don't like giving so much, it's more that I agonize over what to give and probably don't get it right more often than not. By the same token, I end up with gifts from others which I really don't want or need -- it's not that I'm not grateful, but I can see them in that same situation, wondering what to get me, and ending up with something I'm not that wild about.

For me, friendship is way more about spending time together, doing whatever, than it is about exchanging gifts.