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It's time for Olivia Wilde to hang a "Baby's First Christmas" ornament on her tree.

This year will mark the first time the Vinyl actress, 32, will celebrate the holiday as a family of four with fiancé Jason Sudeikis, 41, son Otis Sudeikis, 2, and daughter Daisy Sudeikis, 8 weeks.

"It's just more fun. It's honestly more fun," Olivia told E! News Tuesday at Target's holiday party in celebration of The Toycracker, debuting Dec. 11 on ABC. "It's more exciting. My son Otis is just really understanding what the holidays mean now—that there's all these traditions and that several different people have different kinds. He's really into that. He's fascinated by it."

The older Otis gets, the more he's questioning the world around him. "He's a little suspicious of Santa, but I think that's smart. I think that's a sign of intelligence. He's in the 'why' phase. Everything is, 'Why?' When we told him that Santa was coming through the chimney, he was like, 'Why?'" the actress told E! News. "I was like, 'Fair point! I don't know. It's not so efficient.'"

Daisy is too young to understand what's happening, of course. "She's great. She's amazing," Olivia said. "It's a rite of passage to be a little sleepless, but we are very lucky. She's wonderful."

Olivia and Jason's holiday plans are up in the air this year, "because we've never done it with two [children] before," she said. "We're good at just surrounding ourselves with family, and I think it just means more fun—more dance parties! It just continues to get better and better."

With everything that's going on right now, will Olivia and Jason ever set a date for their wedding? "Oh!" Olivia laughed. "Who has time for weddings when there's Christmas? No."

In addition to raising two kids and making holiday plans, Olivia is also gearing up for her next movie. It's a physically demanding role, so she's been hitting the gym regularly to get in fighting form before cameras begin to roll. "I'm shooting a movie in February called Vigilante. I play a pretty tough character, so I have a very specific goal...If you don't push yourself then you won't be able to do the job as well as you want," Olivia said. "It's helpful to have that specific thing...If it's just a vague idea of 'I want to do better and feel better,' I think that's tough for everybody."