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OP here - thanks, all, for reaffirming what I have thought. I have often wanted to suggest donating to her college fund, but that would never fly. A 529 is not nearly as cute as a dress...or 10 dresses as the case may be.

I ended up sending an email thanking her for her generosity and letting her know that my daughter's closet was at capacity. I also said that we were going to enlist everyone's help in our quest to keep her appreciative of her lovely clothes and toys, and to this end would be asking people to keep gift-giving outside of birthdays and Christmas to an occasional toy, book, outfit, etc. Ironically, we received a second package after I sent the email (that's two in two days for anyone counting) so I felt good about meeting this issue head-on.

I felt like that was fair - not cutting it off completely but keeping it reasonable. I don't have any grand illusions that this will work, but I feel like it's at least laying the groundwork in as much of a non-confrontational way as possible. I can always refer back to something in print to underscore our request.

I don't expect to get a response, but my daughter's birthday is in a couple of weeks so we will see her then at the very least.

Thank you for your feedback and for letting me know that I'm not being petty and nit-picky!
I really need some advice on how to handle a tricky family situation. The background: my daughter is my MIL's only grandchild. There will not be others as we are having just the one and my husband has no siblings. My husband and I are both very committed to keeping our daughter as unspoiled as possible, particularly when it comes to material things - toys, clothes, etc. - especially since she won't be sharing anything at home.

My MIL is the biggest shopaholic I've ever met. She simply doesn't seem to be able to help herself. Prior to our daughter being born, she bought her an incredible amount of stuff. Literally an entire room full of stuff. I chalked it up to her being super excited about the impending birth. Except that it never stopped. We asked her to stop. We told her we have a small house, we couldn't possible use everything she was buying, we wanted to be the ones to buy our daughter's Christmas/Easter/Valentine's Day outfits, stocking, basket, etc, etc, etc. She would bring new clothes and toys and baby stuff every week. After almost a year of this, she and I finally had WWIII over it because I felt like she was completely disrespecting me. My husband is on my page, but it's also his mom so obviously he gives her more leeway than I would. After she and I had the huge blowup, which my husband took part in, she finally got it and stopped the spree.

Fast forward the better part of a year, and she asks if she could buy a few outfits for the fall since my daughter was going to preschool. We said ok, she clearly has understood where we are coming from and will temper her shopping, so sure. What a mistake. This has turned into more and more stuff to where she doesn't ask anymore and just buys and buys and buys. We are back to new outfits and toys almost every week (she lives locally and visits each week). My biggest concern is that my daughter, who is three, is going to start becoming conditioned to expect that when her grandmother comes over she will get new stuff. It's not that big a deal now (and frankly, my daughter isn't very warm towards my MIL, which I'm sure fuels more spending - i.e. buying love) because my daughter doesn't know where her clothes come from, but I'm very concerned about the future and what this teaches her.

I'm pretty sure my MIL knows she's pushing the envelope as last week she gave her two outfits and this week five more, and they were all clearly bought at the same time from the same company. The fact that she didn't give them all at once shows me that she's trying to parcel them out to "get away with it." Also, she mailed the five outfits (along with other stuff), which suggests she probably figures we won't say anything if she's not delivering them in person.

Should I just leave this alone, swallow my objection, and sell or donate the clothes that we don't use and hope my daughter doesn't develop these values? Should I have my husband and I revisit this topic with her - or have him do it alone? Not that it matters, but the clothes are all very high end, and I suppose part of this is the fact that I'm uncomfortable with how much money these outfits cost and that my daughter is a walking advertisement for certain brands with their recognizable logos. It's just not our style, for many reasons.

Sorry for the long post. Any advice would be appreciated. I'm afraid I don't have perspective anymore, I'm just seeing red!

Thanks.
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