(Now I am grown up I still like nice new pencils.)
I would like to decorate a Christmas tree with small toys, and for quite some time I tried to work out how to hang pencils on a tree because of their association with my memories of Christmas.
Eventually I glued three pencils together, tied a gold ribbon around them glued on a small bunch of holly, then glued the bundle to a wooden clothes peg. This is a project suitable for children who can handle craft glue, though you could also use hot glue guns or wood glue.
I use pegs quite a bit to attach items to Christmas trees. Sometimes they are weathered to a soft grey, sometimes new wooden pegs or sometimes I paint them dark green or a colour to match or contrast to the item. Pegs are great if you want something to sit on a branch of the tree rather than hang below it.