As a nice house gift, I made my girlfriend and her three roommates a set of coasters, (in the shape of her favorite animal), that they could decorate to their own liking. I don't normally let other people in on my projects, so this allowed me to share the joy and pride of making something and being able to actually use it.
1/8" hardwood board (oak looks nice)
acrylic or oil paint (for the decoration)
polyurethane (for the waterproof finish)
Total cost is about $8 if you just buy the wood and have the rest of the materials handy.
Step 1: Find a picture
The coasters can be any shape really, as long as they're bigger than the diameter of the average coffee cup, which is about 3-1/4", so any shape longer than 3-1/2" both ways will work.
Step 2: Made a template
The purpose for making this first elephant is to have a template to trace the coasters (and not waste time printing out patterns, cutting, taping, etc). This decreases deviation, so that they all look more or less the same. Also, I can save this template and use it for any future projects that may come up.
After it was sanded to my liking, I traced four elephants onto the wood.