Summarize the following:
Avoid name-calling, insulting or insinuating anything about your sister-in-law. Instead, explain how you feel when the proverbial dung hits the fan whenever you're in her presence. Your spouse cannot fault your feelings, so be clear and thoughtful in stating them. This puts your spouse on notice that you've recognized the behavior of your S-I-L for what it is and that you have chosen to no longer accept being at the receiving end of it. For example, "Georgia, when your sister talks a lot about how hard it is to fund her children's private schooling, I feel claustrophobic because she doesn't know when to stop discussing it. Given that we can barely afford our mortgage, I feel a little distressed at this kind of talk all night. I'd like to stop putting myself in this position from now on by simply acknowledging her problem but not letting her continue discussing it all night and I'd like you to help me do this by finding other subjects to talk about that don't involve money. Do you think that this is something you can get on board with?". Tell your spouse that you love to hear about how your sister-in-law is doing but that you don't appreciate hearing about the embellished drama that often comes with it. Help your spouse to recognize what you consider to be "drama" from what you consider to be "real news" and in time, both of you will learn to speak about family matters in a less dramatic and more emotionally healthy way.  Remind your spouse gently whenever you feel that your S-I-L's drama is being repeated in your house. You could even have a special signal rather than having to spell it out each time. Place a ban on gossip at home (or anywhere). Remind one another whenever it veers anywhere near close to gossip and shut it down. It doesn't matter if you feel you are being gossiped about; you're the bigger person for not engaging in the same behavior.
Talk to your spouse about your feelings. Ask your spouse to think carefully about the way in which he or she relays information about family issues.