After no one in Dimmsdale gets the gifts that they want for Christmas, Timmy Turner wishes that Cosmo, Wanda and Poof could give everyone a wish-granting coupon in the mail. Things go wrong when Vicky wishes for a million wishes causing her mailbox to explode, and everyone catches the falling wishes, thus causing the Big Wand to overload. Jorgen von Strangle has to shut off the fairies magic power. Soon, Christmas is replaced with "Wishmas" and an unemployed Santa Claus moves in with the Turners. Timmy must devise a way to end Wishmas and get Santa back to the North Pole.
After Vicky gets fired for erasing a videotape that the Turners were saving so that they could use it to get their own reality show, she decides to take over Dimmsdale and wage war on Earth. Timmy Turner must now stop her and return her to babysitting at all costs! Unfortunately, every time Timmy wishes she wasn't the ruler of something, she assumes the role of a more powerful position until she becomes the "Supreme Ruler Of Everything That Breathes".
Timmy discovers that the current lameness of the recent issues of Crimson Chin comics is because that the Chin is lonely, so Timmy wishes himself to Chincinnati and creates a super heroine match for the Crimson Chin called "Golden Locks". But when the comics get too mushy, Timmy changes her into a villain called "Hair Razor", and must now change her back to avoid the Chin's end.
After Catman keeps injuring himself and others by crime-fighting, Timmy Turner convinces him to quit being a hero by telling him that he has used up all but one of his nine lives. With the now-retired Catman living with him, Timmy tries to find a safer job for him, but each job leads to someone/something getting attacked.
When Mr. Turner quits his job to become a sock monkey salesman (which fails horribly because no one buys them, noting they don't do anything), the Turners turn their house into a bed and breakfast inn to avoid bankruptcy. Unfortunately, their first guests are Mr. Crocker, Dark Laser, and Tootie. Timmy cannot make any wishes to rid himself of his guests, because if he does then Crocker's Magic Detectors will track the magic back to his fairies and capture them!
Timmy looks forward to his birthday until Jorgen von Strangle reminds him that each birthday draws him a year closer to losing his fairies; however, Timmy isn't worried because his parents always forget his birthday; that is until he sees them setting up his party decorations!