This is just a vent from me, feel free to join in if you know what I mean or just have a vent of your own ;)

Dh & I are very frugal.  We've had to work our way through high school and college supporting ourselves and our children.  We want our kids to know the value of a dollar and the special feeling of getting a gift.  We rarely buy our kids toys unless it is their birthday.  They get plenty of toys from our huge extended families between Christmas & their birthdays let alone the stuff they accumulate in between.  When we do buy them toys, they are almost always educational.  We have a closet full of board games and they each have a library of books.  We prefer to allot some money to do family things together (swimming, out to eat occassionaly, shows @ the theater, music/dance lessons, etc)

 My 8 yr old step-daughter expressed an interesting opinion to us just the other day.  She thought we were not normal parents because we don't buy them stuff "all the time".  Like how her mom gets her at least one thing EVERY time they go somewhere.  (like candy from the grocery store, a stuffed animal, a balloon...we see this stuff show up alll the time)  And her grandpa gives her money each time she sees him (which is @ least 3 times a week) and has gifts for her each week.  Like wrapped and everything. & my MIL buys about $50 worth of stuff from her book orders each time it's sent home.   It's very disturbing to see all these 'things' just thrown to the side because she has no actual interest in them, just in GETTING them! [no exaggeration here]

Her mother complains to anyone that will listen, in front of my sd, how spoiled and lazy (from not picking up her mounds of things) and selfish she is.  I hate to say it (& never would to her face) but YES, she is all of those things.  Think Varuca from Willy Wonka...  But there's no excuse.  What do you think is going to happen when she gets things regardless of her behavior and so frequently that she can't even imagine the thought of it not being normal!! 

No amount of mediation will help this matter.  And all reson is lost in this woman's eyes.  She will snap on you for no reason other than you don't giver her what she wants...  ! Sorry you have to hope on winning the lottery every month to make your bills while your daughter's well-being is being neglected !

We will continue to pay our student loans and make financially responsible decisions while showing and teaching our children the true meaning of family (togetherness) and wants-vs-needs.  *It's not enough to want a puppy... lets research and read to see how much their care costs over time... Now do we prefer to get a house in the next ten years or get a puppy that we'll have to get rid of if times get even a little tough.*  My son wants us to get a house, he's also 8.

I know just how you feel.  My DH and I budget everything and very rarely do we buy our children gift except for Christmas and birthday and we sometimes skim on the birthday because they already get so much stuff from everyone else.  I look at their rooms right now and they stay messy because of all the toys they have accumulated over time.  I know that its the memories and the time spent will family that will last.  The toys they got for Christmas or that one doll they wanted for their birthday so bad will soon be a distant memory.  I don't feel the least bit regretful about not buyting them things every chance I get.  And I feel people that do are only trying to buy the affection of my children instead of earning it.  When my daughter sees my MIL the first thing she says is "can we go to McDonalds?" or "can I have some gum".  And its sad but its her own fault, if she spent more quality time with her instead of giving things then she would get a different response.  I have a 3 present rule for Christmas, they get one toy as a gift, the second is pajamas, and the third is either board games, books or a family movie.  I have stuck by this policy for three years and this year my SS mom finally jumped on the bandwagon.  She has the same problem with my SS him keeping up with his stuff and keeping his room clean.  She decided not to get him anything, because he already has so many toys he doesn't play with.  I was very proud of her.  I tell my DH all the time my kids may not like the things I do now but when they're older they will learn to appreciate the things I am enstilling in them.  And it sucks but all you can do is pray and believe that some of the things you are teaching will stick with your SD.

SN:  Ask your DH to talk to your SD's mom about speaking that way not only in front of her but about her.  The words we speak over our children can be very powerful in shaping their self-esteem and their personality.