I think the time comes where everyone has to limit what is spent at Christmas each year on gifts. I only now buy for immediate family. Everyone else just gets a card. In fact the whole family just does this and it is understood. Just communicate the situation about your limited money to buy gifts this year to your extended family, they should not be offended. In fact, they should welcome that they too wont have to buy for as many people. After all, Christmas is not about the gifts. As for kids in the family, you can always shop for things at discount stores such as a $5 and below or even a dollar store. Kids don't know how much you spend on a gift, they just enjoy opening something for Christmas. You'll be surprised at how many decent items you can find at a $5 below, several board games, games for the computer and so on. Since kids like to open gifts, buy a few cheap ones and wrap them individiually to give them more things to open.

Good luck and merry Christmas!

I understand your frustration! We have had to cut out a lot of gift buying this year as well. My extended family cut out buying for adults. We are just buying for kids this year, and maybe giving an inexpensive homemade gift or token to grandparents and aunts and uncles. We set family buying limits for the kids, so I am spending the same on my brother's three kids as he is spending on my two kids.

We are making photo Christmas ornaments for the grandparents. I found some rather nice looking photo frame ornaments at the Dollar Spot at Target with the year on them. I inserted a photo of the kids and added a nice ribbon. A nice plate of holiday cookies also makes a great gift.

I think the kids will understand. Most kids are surprised and thankful for any gift. If you suspect some of the kids will notice your frugal gifts, simply explain that money is tight this year. Any kid old enough to take notice of the price of a gift should be able to understand this.

In my opinion the absolute best gift in the world is time! Time spent with a friend, child, parent or relative. With the way the economyis right now we are all pretty much in the same boat.

This year our family and extended family is being creative. We have placed a $10 limit on gifts for the children and agiftof time for the adults. One of the best gifts that I ever received was an 8-hour gift certificate of time from my best friend. I cashed in by having her help me to re-arrange my closet! We laughed at all of the junk we threw out and reminisced over some of the stuff we found. I returned the gift by helping her to paint her kitchen.

Children also love the gift of time. Give them and 8 hour gift certificate of time and put the restriction of: “It cannot cost money”, but allow them to choose the activity. A few suggestions would be going on a hike,fishing, playing a sport, teaching them to sew or knit, baking, making candy, climbing trees, feeding the ducks or just a plain old picnic. Children love the undivided attention of someone they love. When they are grown, these are the things that they remember over that dump truck or doll that they received as a gift.