Go to the park. Go for a walk or bike ride. Go swimming at the beach. Have a picnic. Be kids again and play on the playground. It's free and you can get some exercise and fresh air.
Cook something amazing. Gather at the biggest/most well equipped kitchen among your friends and make dinner. Or cookies. Or jam. My family has an annual apple processing day where we gather to preserve lots of yummy food and talk.
Get crafty. Meet for knitting/crochet. Have a quilting bee. Scrapbook or make cards and share markers and fun scissors. Try fun new DIY projects such as T-shirt scarves. You can share materials and enjoy snacks and drinks at home.
Meet for coffee instead of a meal. Even meeting at a mid-level restaurant for lunch can set you back $10-15. If you get a basic coffee, it'll only cost $2-3. Do this once a week instead of a meal and you'll save $400-600 a year. For tips on saving money at a coffee house, see Cheaper Cup O Joe.
Have coffee at home instead of at the shop. I used to meet one friend at a coffee house every week for tea and bagels. After tip I was spending $6.50 each week. We started meeting at her house and took turns supplying the tea, bagels and cream cheese. By shopping sales, I could supply everything for $4 or less (considering that I would freeze the extra bagels for the next gathering and one box of tea would supply 10 weeks of gatherings).
Go to a thrift store instead of the mall. Malls are expensive. It's too easy to completely blow your budget when you walk into a mall, especially if you see a big clearance section (the Achilles' heel of the Frugalite: that red mark-down sticker!). And while you can blow your budget at a thrift store, it's a lot harder to do. I love to dig around in thrift stores with friends. We can look out for particular items for each other and giggle at horrible clothes and wall hangings.
Run errands. If you (or a friend) are super busy, you can get some face time by running errands together. Go to the grocery store and catch up while you walk up and down the aisles.
Make dinner at home instead of eating at a restaurant. I can make a nice dinner for 4 for less than dinner for 1 at a restaurant (thanks to my mad grocery shopping skills). Have the friend bring beer/wine and you'll both save while getting a great meal.
Have a movie night at your home instead of at the theater. One person can bring drinks, another popcorn, and another candy. Watch an old movie from your collection or rent a new release. Either way, it will be much cheaper than the $10 ticket plus $5 soda and $8 popcorn at the theater.
Get in shape. Make a commitment to get fit together. You can keep each other motivated while having fun. Go for power walks around the neighborhood, go for a long hike or do yoga in the backyard.
Go to a free concert. Find a no-cover bar that has good live shows. If you can nurse a drink or two for the evening, it can be very affordable. Ask about specials. If there is a late-running happy hour, you could show up a little early to take advantage. One bar that I used to go to sold $1 PBR. While I'm a bit of a beer snob, if I were really hard up, I'd consider drinking it so I could have a $2 night out.
Go to free cultural events together. Go to gallery openings or to museums on free days. Go to plays, movies or concerts in the park. Go to a poetry slam or open mic night at a coffee house.