Lawrence.com

My husband and I were both forced to take pay cuts recently, and so we're spending less this holiday season. How do we break the news to our children that this will be a lean holiday, after having spoiled them with so many toys in the past?

Worried about jobs and declining stock portfolios, many parents find they can't afford to load up the tree like they did in the past. Telling your children that you will have to cut back on gift buying without deflating their excitement for the season is tricky, but it can be done. The key is discussing the subject in a positive way.

Many experts see this as an opportunity for parents to bring back the true meaning of the holiday season.

"This is a great opportunity to get back to the roots of family and friends," said Houston-based Dr. Gail Gross, a child development and behavior expert. "Children can cope. Children take their lead from their parents. It's how you approach things."

Parents who have indulged their children with many gifts in the past and who have kids with lofty expectations might have a harder time. On the other hand, younger children, who don't understand the price of items, might be perfectly content with a larger number of gifts that could cost just a couple of dollars each.

Here are some tips that parents can follow to help their children accept the situation.

1. Find out as early as possible what your children's wishes are. Discuss which gifts are most important to them, and find out the costs for each. And then begin to prepare them for what they can expect.

"Parents must not 'play along' silently or passively with their child's high expectations," said Dr. Peter L. Stavinoha, a child psychologist at Children's Medical Center in Dallas.

2. Discuss your financial hardships in language that they will understand without scaring them.

For teenagers, parents can be fairly clear about their own personal finances. For younger children, the best approach is to keep it simple, saying money is tighter this year.

"You don't want to shake the child's security. You don't want to send them into a panic," Stavinoha said. He suggests holding a family discussion to address changes caused by the loss of income, and family spending priorities.

For children who believe in Santa, Gross advises parents to tell children that "Santa is thinking more of the heart."

3. Stress the spirit of the holiday by getting your family to volunteer as well as partake in family activities, like doing crafts at home or going to museums

4. Emphasize to your children the many things for which they should be grateful.

Don't get caught up in a discussion with your children about the trendy new leather jacket or other "must-haves" that some of their peers are getting. Remind them of the traditions, relationships and material things that they have, Stavinoha said. Have a discussion about other families who are less fortunate.

5. Become role models for your children, and de-emphasize your own consumption of material goods.

"Kids will be able to understand the situation :quot; if their own parents are modeling the behavior," said Dr. Eileen Gallo, a psychotherapist, who runs The Gallo Institute, an organization that educates families about money and values.