Pan Preparation: Take an 8x8-inch baking dish and line it with parchment paper, allowing the edges to extend beyond the sides for easy lifting later. Set this aside for now.

Chocolate Melting Process: In a medium-sized saucepan, combine the white chocolate chips with sweetened condensed milk. Heat this mixture over low flame, stirring continuously until the chocolate has fully melted and the mixture is velvety smooth. Once melted, remove the pan from heat and mix in the vanilla extract for added flavor.

Divide and Color: Divide the mixture into three equal parts. Leave one part white and tint the other two parts with red and green food coloring, respectively. Stir well until each part reaches the desired color.

Create the Swirl: Drop spoonfuls of each colored mixture randomly into the prepared pan. Use a toothpick or knife to swirl the colors together gently, creating a festive marble effect. Be careful not to over-mix, as this can muddy the colors.

Add Sprinkles (Optional): If desired, sprinkle holiday sprinkles over the top for an extra festive touch.

Chill and Set: Refrigerate the fudge for 2-3 hours, or until fully set. Once firm, lift the fudge out of the pan using the parchment overhang and cut it into small squares.

Serve or Store: Serve immediately or store in an airtight container in the refrigerator for up to one week.