Here's the solution Russell and I decided on:
(and I am going to add a stocking for christmas) (from here)
We decided to do this about a week ago - and I absolutely love it!
I've been realizing that the way to help the kids to be excited for christmas/birthdays, is for them to know what to expect. By having family traditions be more of the focus and knowing how many presents they'll get - there won't be this pressure to try to top ourselves every year. There's safety and security in limits! It's amazing! It's a parenting principle I've heard over and over, but I'm just now starting to get it.
It's also made it so that we'll be more deliberate and careful with our gift choices. If they're only getting a few things, we're going to be sure that it's going to be something that will last. I'm not looking at sales online trying to get the best deal on something. I'm not going to get something just because the kids would like it, and it's inexpensive. No more impulse buying.
I used to wonder at the people who said "We always have our christmas shopping done weeks before Christmas! Or even by Halloween!" What!? Can you ever be done? I used to pick up little things for them at walmart in the clearance section all the way up to christmas. The more presents wrapped the better. All the time completely oblivious that I was conditioning them to want and expect more and more. And that I was feeding a growing panic in myself that I was missing some great deal, or that it wouldn't be enough.
I'm pretty embarrassed now that I've written it down. I guess I've become kinda addicted to stuff. But I'm letting it go. It's such a relief. We really don't need much. And even beyond that, we NEED only a little. More will actually be detrimental.
Russell and I sat down and thought carefully about what the kids would really want, and THEN went the internet. Found the best quality for the price, and bought them. And guess what - we're almost completely done with our christmas shopping. And it only took a couple days. :)
This, this and this helped me to see that this was really possible, and actually probably the better way.
And as for making christmas magical. Going to disneyland has helped convince me that the sense of "magic" that you get, comes mostly from the mood, music, and lighting. So for Christmas - up go the lights! on with the music! and cookies can't hurt. :)