a manger or box
I convinced John to build our little manger a few years ago, but you could also buy a small crate or use a shoebox. We keep a jar of straw colored yarn next to the manger, already cut into pieces about the length of our manger (you could also just keep the skein of yarn and scissors nearby). And I made a baby doll a few years ago, seriously simple and made from scraps, but of course, you don't have to make one. Any small baby doll wrapped in white cloth would be perfect. [If you want to start this year, all you need today is the box and yarn, you still have time to get the baby. :) ]
And then we pay attention to each other and try to be kind.
Anytime we notice someone doing something kind or selfless, they get to add a straw to the manger. It's not very structured, it just sort of works spontaneously, e.g. "That was so kind of you to share your dog with your sister, June! Would you like to put some straw in the manger?" "Mommy, thank you for making lunch - you should put straw in the manger!" It is rewarding to put straw in the manger, but it also feels good to be aware of other people's kindness, too.
We explained to the children that just as Mary and Joseph made a soft bed for Jesus from the straw, when we are kind to others, we are softening our hearts to make room for Him, too. Even a dark cave filled with livestock can be a welcoming place when we are kind.
Many advent traditions bargain with you to being nice in order to get stuff, or give you treats every day on the way to Christmas. I like this tradition because, instead, we are working together to make something beautiful. On Christmas morning, when the manger is brimming with soft, kind yarn - before the girls get up, I will lay the baby in the manger. And we will all remember that Christ is born and God is with us!