The best tip is to do a real potluck where each friend brings a specific dish or drink that you've coordinated beforehand. That way nobody spends much and you all eat well anyway. You can arrange it so one person brings an appetizer, another brings the main course, another brings dessert, and so on. It costs way less than everyone making everything from scratch, and you get variety.
To make the space look nice, invest in cheap details that make a difference: hang up some LED lights (those rope ones are really affordable), put on a playlist on Spotify, decorate the room with some colorful balloons. You don't need to spend money on expensive decorations to make it feel like a party. An old projector or even the TV is enough to play some cool videos or a movie while the year turns over. As for drinks, instead of expensive champagne, just get a cheaper sparkling wine, it works just the same for toasting.
If you want to do something more different, you guys can play a board game, do karaoke on YouTube (it's free), or even a challenge like "new year, new challenges." Everyone writes something they want to do in 2027 and you read them together when midnight hits. It's memorable and costs nothing. What really matters is being together with people you like, not how much you spend. Have fun!