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I have two different tacts, and am doing both simultaneously. We're lucky my husband's job seems secure right now, but his compensation has been cut about 15%. Normally, we save our Disney Visa reward dollars to go to the World every couple of years. This year, Santa did 3/4ths of his shopping at the Disney Store. A Camp Rock electric guitar for my 8 year old, and drum set and U-Command Wall-Efor my 5 year old son. Video games and clothing for the whole family will round things out nicely. We probably won't be able to take a big vacation anyway for a while.
Also, we've been impressing upon the kids how lucky we are to have not only toys but warm clothes and a home. Our babysitter teaches at an inner city school where many are not so lucky, so we're making care packages out of our gently used warm clothes from last year, with a special one for a sweet boy who is homeless. We've also taken food to a local food pantry and plan on doing it again a couple days before Christmas to reinforce that Christmas is about GIVING not getting. That's a hard concept for kids (and some grown-ups) but we're trying.
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