I need to make some custom print photos

[JC86]

First of all, other than a year of yearbook photo editing with photoshop and pagemaker 8 years ago, i'm a complete newbie when it comes to photo editing and printing. I have a pretty good HP all-in-one photosmart printer and would like to make some custom prints for a christmas gift. The photos need to be about the dimensions of a credit card because they're going in to a wallet that has a mini photo album inside. I have some 5x8 photo paper but when i tried to print a photo from iphoto, it was the entire size of the photo paper. What software do I need to make custom sized prints? I was thinking maybe I need to buy some full sized photo paper and print multiple photos on the sheet and then cut them to size if that will work. I really don't want to have to shell out 200 for photoshop because I do little to no photo work. Are there other programs that will do what I need to do? any help is greatly appreciated.