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Id just say we aren't going to be part taking on gift exchanging this year as we feel we need to save on our costs for when baby number 2 comes in the new year and just buy like tubs of chocolate pair family, so I.e one box for your parents, then one for partners parents etc keeps the cost down and it's still a small token x
Why not replace the gift for something cheap. On our end we have this fun gift exchange where we actually buy each other scratching cards instead of gifts. Not that we gamble. We never do other then at Christmas. But for our gift at Christmas we exchange various scratch cards (rule is it has to be from the £2 variety). With my group of close friends we exchange just Christmas decorations. Like a Christmas tree bobble, so we still keep the spirit but not break the bank on stuff that will just go to a charity shop later on anyways Maybe propose something like this to everyone or just bluntly say: please don’t buy us gifts as it’s a difficult time for us (financially and lack of free time to go gift hunting) so we won’t be buying presents this year. Your family and friends love you and will understand. Probably some will be themselves relieved.
You could make things for people with your toddler. Make them aware money is tight and you're not buying presents but you can still give them something to keep in the spirit of Christmas 🥰
I’m in the same boat atm. My LG is due 8 Jan it’s all to much