When 7-year-old Faith Corbin asked her mother for a Ruthie Smithens doll for Christmas, her mother gave her some bad news. Because of the bad economy, there would be no expensive dolls this year.

"I can't really justify spending another $100 on a doll," says Barbara Corbin, 42, of Bowie, Md. Declining home values and mounting expenses for everything from school to food have put an end to the days of buying her four children whatever they want, she says.

Having...