Combine graham cracker crumbs, melted butter, and granulated sugar in a bowl; press mixture firmly into the bottom of a 9x13 inch baking dish.

Chill the crust in the refrigerator for at least 15 minutes while preparing the next layer.

In a large bowl, beat softened cream cheese, powdered sugar, and 1/4 cup milk until smooth and creamy.

Gently fold in 8 ounces of thawed whipped topping until well combined.

Spread this mixture evenly over the chilled crust.

In another bowl, whisk together the instant vanilla pudding mixes and 3 cups of milk for 2 minutes until thickened.

Divide the pudding into two separate bowls. In one bowl, stir in green food coloring; in the other, stir in red food coloring, if desired.

Carefully spread the green pudding mixture over the cream cheese layer, then spread the red pudding mixture on top of the green layer.

Spread the remaining 8 ounces of thawed whipped topping over the pudding layers.

Decorate with Christmas sprinkles and mini chocolate chips.

Cover the dish and refrigerate for at least 4 hours, or overnight, before serving.