Here are the things you will need (I made this for around $18.00)
short log or stump with the bark on it (around 18" tall, around 8" in diameter) The size of this can vary, but the Santa hat must fit around the top of the stump. The stump must also stand somewhat straight, so be prepared to cut it if necessary to level it off. If you are having trouble finding one, do what I did and post what you need on Facebook and see if your friends can help (in my case, one magically appeared on my front patio within 24 hours!).
1.5" googly eyes (2 of them of course)
2" or larger red pom-pom for the nose
Thick cotton mop heads (not the stringy ones, but the thick ones). The number needed for this varies based on what size mop head you can purchase. I used 8 cheap deck mops from WalMart (see http://www.walmart.com/ip/Mainstays-Home-Cotton-Deck-Mop-1-ct/12444508). These were $1.72 a piece, so the cost wasn't so bad. I probably could've done this with a little fewer but I wanted the beard/hair to be thick!
Hot glue gun- and LOTS of hot glue sticks.
String (cotton twine)