I hate the gift exchange crap, too. We tried to do charity gifts for several years and some people were into it, and some weren't. We still do it for my BIL because his daughter was a preemie so they support March of Dimes. They do Donors Choose for us. Books for their kids.
My SIL is the one who poo-poo'd the charity thing, didn't get us anything and said "I give to my favorite charity: me" Really? So we didn't do gifts with them for awhile and then she sent us something and we felt like we had to send stuff back. When we first started dating their tradition was to get each other something from their amazon wishlist which drove me nuts.
My parents we try to do handmade gifts or something similar. DH's mom is SO hard to by for, we've tried everything but she has tons of stuff and doesn't usually use gift certificates for services. We don't do gifts for DH's dad and stepmom, or my brother (tension/estrangement).
Not sure what we are going to do for each other this year, but there's a tradition I saw on pinterest I really want to start for Lyle, although it's a bit harder at this stage. Christmas is "one thing you want, one thing you need, one thing you wear, one thing you read" and then crap in the stockings. ;) My friend told me something funny, she said the "Santa" gifts were always crappy, because she wanted her kids to know that big things came from them, and then if there was a time where they were in financial hardship, it would be like, oh yeah, Santa brought you a board game like he always does. I don't mind Santa, but we're not religious at all, so the whole thing is kind of whatever. Maybe the Santa gift can be the "one thing you need" or something.
Problem with this want/need/wear/read thing now is what does a baby want? :)
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