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A kid with bright blue eyes peers over a pile of christmas giftsIlka-Erika Szasz-Fabian

Ever wonder whether a gift exchange has run its course?

For my family, this time of year means getting together with a lot of people we rarely see. It's an awesome thing – one of the bonuses of the extra time off most of us get this time of year. But sometimes along with these get-togethers comes a gift exchange. Maybe it's out-of-town cousins who always bring a gift for your kids (and you reciprocate for theirs), or a group of old pals who always do a "Secret Santa" gift exchange with each other.

Back in the day, these gestures made sense. But these days I find myself wondering: Couldn't we just skip the presents and hang out? The problem is when you have an established gift exchange, putting the kibosh on it is a delicate matter. After all, no one wants to look like a cheapskate Grinch.

Toronto counsellor and psychotherapist Kimberly Moffit says it's perfectly normal for Canadians to want to cut back on gift exchanges in this sluggish economy (so there's no reason to feel guilty), but it can also be a very challenging thing to do.

"We don't want to hurt anybody's feelings, and it can also feel very shameful to say, 'We're cutting back, we don't have enough money to give you a gift,' " she said. "It can be very sensitive, so you want to make sure you think about it long and hard before you actually do it."

There are frugal alternatives to nixing a gift exchange entirely, says Ms. Moffit.

"We as humans, we psychologically place a lot of emphasis on things that are homemade, so instead of refusing a gift exchange, you could give someone homemade wine ... or if it's a good friend, make a collage of pictures of the two of you together over the years," she said. "It doesn't cost a lot of money, but would show them you put a lot of effort into it."

But if you do decide to opt out of a gift exchange, try and make these decisions as early in the season as possible, says Ms. Moffit, so that you can tell everyone involved well before any colourfully wrapped boxes trade hands.

"Instead of waiting for the gift exchange to come up [in conversation] instead of the day creeping up and you getting anxious about it, you're empowering yourself and taking matters in your owns hands," said Ms. Moffit. "You don't even have to say, 'We're going through rough financial times,' you can just say, 'We're trying to save up for something really special for the kids, and as a result, we're cutting back in other areas, so we don't want to be involved in this gift exchange, don't worry about buying for us this year.' "

Sounds rational enough – but what if your suggestion is met with hurt feelings?

"If it is a good enough friend, they should be able to take that information and not take it personally," said Ms. Moffit. "Make it very clear to them it has nothing to do with your friendship and suggest that instead of going out for a fancy dinner the way you often would have, maybe you could make them dinner at your house, do something where you're spending that quality time, but that doesn't involve a monetary gift."

And if your college bestie brings you a gift anyway, even after you've asked her not to, don't sweat it, says Ms. Moffit.

"These things aren't under your control, if you've already talked to them and they show up with a gift, it's not your fault," she said. "You can't refuse the gift because that could be seen as rude."

Ms. Moffit says there's one way to always make sure you're not left empty-handed.

"I always recommend, even if you're not giving someone a gift, you should always give them a card," she said. "You can say some nice words to somebody and tell them how they've impacted your life. That's not expensive, but those words can feel amazing."

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