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Christmas gift concerns with nieces/nephews

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I know it seems there are a ton of Christmas related questions on here so I'm sorry for yet another one :-/.  Here's some background:


 


My DH has a brother and SIL who now have 3 kids.  There are a single income family so I understand times are tough.  We all agreed that this year for Christmas it would be "kids only."  My DH and I have no kids (but expecting May 2014) so essentially we're buying for their family but our family doesn't get any gifts this year.  Which is fine by us.


 


The concern I have is that we're significantly downsizing our gifts to the nieces/nephews this year.  DH's own parents are as well because, as my MIL said, the family is growing.  There isn't a bigger pie...everyone just gets a smaller piece of it.  In 3 years we went from 2 nieces (one mine, one his), to 6 nieces/nephews.  Three of them are all just his ONE brother's kids.  I have 4 sisters and with 3 kids between all of them. All singletons too.  In the past we would spend about $30 per kid but not with 6 nieces/nephews and our own on the way we've downsized this to only $15-$20 per kid across the board. 


I'm concerned though about the reaction my BIL and SIL will have.  I would hope they'd understand but I think they'll expect more because we're a two-income family.  But student loans and day care aren't cheap.  We have to live like a single income family too.


 


Any ideas how to GRACEFULLY respond to my SIL voicing her concerns/disappointment?  She can be pretty blunt. 


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