I need some good parenting advice

So, Christmas is coming.  The goose is getting fat.  Oh did you forget?  Well it is coming, ready or not.  Nick and I consistently find ourselves completely NOT ready for Christmas.  It's our special Christmas tradition.  Now when I say "not ready", I mean the "never-enough-money" kind of not ready.  Who isn't right?  Well Bill Gates is probably usually ready, and also those moms from Beverly Hills Housewives (60 K on a birthday party, seriously!)  Me and Nick?  We're good at never being ready.

This isn't really a problem when you are newlywed, no one expects you to have money for gifts.  It's also not really a problem when your children are young.  I can remember a few years in which we wrapped a box of cheerios and called it good.  Those were great years!

Well, about 6 years ago we had a baby boy.  He grew a little and we had another baby boy.  That one grew a little and we had another baby boy.  Today we find ourselves elbow deep in little boys that have sugarplums dancing in their heads and believe in EVERYTHING from Ghosts to the fact that they are all magical Wizards.  They especially believe in Santa Claus.  They definitely think that decorating the house is very important (I hate it!)  So we decorate, and I can honestly say that it is always for the kids.  Nick and I always enjoy doing it together, but I must admit that if it weren't for our boys then we would be a bit more...Humbug.

I have a problem this year.  Gabe and Ian are sure that they are going to get what they want for Christmas, because Santa is magical and as I already mentioned, we believe in magic in our house BIG TIME.  Gabe wants  a nintendo DS and Ian wants a Spike the dinosaur, both of which fall above our price range.  My question to all of you is, how do you handle this?  Usually we try to talk them into different things, but they are really quite adamant this year that this is what they really want and know Santa will bring them. I know that I can't be the only parent in the world with a budget, so tell me your secrets?  How do I get around this obstacle without crushing hopes and dreams?