Can you say no to your kids?

The other day I was at a donut shop buying coffee and I saw two little girls with their parents and when they were leaving I saw one of the girls pointing to a cup and wanted to buy it but her parents flatly and cheerfully refused and they were not that fussy about it either so they left without any crying or tantrum. And it got me thinking that if you can ever say no to your kids and if yes when and if no when? It is heart wrenching when you can afford to buy a stuff but have to say no because of your budgetary constraints or you know that once you buy it, it will be used once or twice and then the kid will move on to something else (I know this experience from my own kid). Although we try to keep a balance between needing to have it and wanting it badly but there is always a constant battle between the two. And when you are unemployed or with limited means then it really becomes hard to distinguish when to say yes to a legitimate child's desire and when to say no even though you know that it is needed. Because you don’t want to tell your kids that you are unemployed or don’t have the money, since they don’t know the meaning of that when they are little and when I was unemployed, we used the same tactics to tell them that I was employed and she did not have to worry about the money.