Having been a "good girl" all year long (and perhaps longer), the young lady of the song wants her boyfriend to commit to marrying her by giving her an engagement ring for XMAS. She buries her request for the ring in a list of impossible gifts which her "Santa Baby" can't afford. He CAN afford an engagement ring; the young lady hopes to tease her lover into proposing marriage if he really does believe in her as much as she believes in him, her desired future husband, her "Santa Baby."