Hi W.,
I know how hard it is to try to be a good mom. There are no easy answers! I have an 11 y.o. boy and a 13 y.o. girl, and we struggle with this issue sometimes, too, so I'm no expert. But when you talked about punishment, it struck a chord with me. I totally agree with the other moms that said not to threaten them with something you will not follow through on. Additionally, I feel strongly that when our discipline isn't working, you need to make sure that the item or privilege that the child loses is something meaningful to that child. If it's not something they care deeply about, it may have no impact.
Recently I wrote to Mamasource looking for advice for how to deal with our previously near-perfect daughter. We had moved here over the summer, and she was seriously misbehaving for the first time (had run up a couple thousand dollars in texting charges before we even knew she was doing it, stealing back her cell phone and talking late at night, opening a "secret" e-mail account we didn't know about--pretty innocent messages, but still!). She kept telling me she didn't know why she was doing it, that she "couldn't stop herself," all with dead eyes.
I had taken away her cell phone, her computer privileges, etc., made her keep her door open (rent house--couldn't remove it), but it got so bad that I threatened to strip her room completely. Well, I found her having taken her cell phone from the charger, talking under her pillow late at night again. She said that she expected to get caught. So I immediately started taking her "fun" things from her room. Her cool new bedding, her fun decorations, her jewelry. It didn't seem to make any impression--in fact, she said she expected it. But when I started removing her books... Well, that was another matter entirely. Suddenly she card A LOT. And when my husband and I started talking about finding a new home for her cat, again, she suddenly cared a lot.
I know this sounds extreme and punitive, but we were feeling very desperate. I had made a threat, and now I needed to follow through. But we also made sure to tell her that we were only doing this because we loved her, we felt that she was a very special girl, and that she was on the wrong path, one that would never lead anywhere good. We made sure to tell her repeatedly how much we loved her, and gave her lots of hugs, whether she wanted them or not.
After a couple days without books, we started to see some changes in her attitude. She seemed to get tired of being cold and distant. She started laughing at family jokes, hanging out with us more, etc. Soon she was asking if she could have just one book back. We told her that we'd have to see a difference over the whole weekend, not just for a day.
Within a week, we had our old daughter back. I think she saw that we cared enough about her to go to extremes. Again, I think making sure she knew that we were doing what we did because we loved her and wanted the best for her, not just that we were mad, was very important.
All this to say that maybe if you threatened to make Christmas a much smaller present event, it might be okay to follow through. It might make a real impression on them, especially if you combined it with spending time volunteering to help people who don't have much. I think in our culture we struggle with trying to give our kids a lot because we love them so much. They don't realize that so many others aren't blessed with the love and material things that they take for granted.
Hope this helps! Wishing you and yours a very Merry Christmas!