I am going to keep this relatively short as it is over 90 degrees and I don't have A/C (a great way to save money, but slightly uncomfortable).
In our town: We did many things for summerfest that were all free, we did not spend a dime while we were there. We have been attending the public library's presentations about countries of the world (2pm on Wednesdays), There are other periodic, mostly holiday related activities that we have done too. Plus there is always fishing, biking, walking, hiking, parks, and any other way you can enjoy the outdoors...ooh, how about sledding, I would love to think about sledding right about now ; )
In our surrounding area: Austin has the Spam museum, free to all and we are going there tomorrow (post soon after). Rochester has free entry to the art center for Olmsted residents. We have done ____ days events in other towns before, Like Rolling Stone days where I sit at my Crazy Elephant booth and Adam takes Jayne to all the fun events and parks. We have seen movies at the public library in Rochester and they also have walk through exhibits on occasion. The local movie theaters have free movies quite often too, you just have to see what is playing and when. Think bank is also giving out tickets for an evening at the zoo, so make sure to keep up on goodies at your bank, you never know what kinds of fun events they might have cooked up. And if you want to hit a zoo close by, you can hit Oxbow Park.
Within 2 hours of our house: The Como Zoo is free and I especially love the conservatory. We get a yearly membership at the MN Zoo. It is a great bargain for how much we visit and we get discounts on other zoos throughout the country. The history museum in St Paul is free and educational. The children's museum is free on the 3rd Sunday of every month (thanks to Target, who pays for all admissions). It is quite busy on those days, but still fun and your kids will probably pass out in the car on the way home.
I know there are probably a lot of things that I missed. Take some time to look around and you might find something you never thought you would try, or even something that you never thought you would do because it was too expensive, turns out to be a great deal if you time it right. Share some of the things that you love to do in the comment section. Maybe it will be just the idea someone else was looking for!