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If you feel your child is ready for the truth, there are different ways to approach the conversation.  Explaining who "Santa" really is rather than simply saying he isn't real can help make the transition a lot easier.  Whether you're religious or not, explaining to your child how Santa Claus came to be as we know him today and the history of the tradition, all the way back to the real Saint Nicholas, may lessen any disappointment they feel and encourage them to help others. You can shift their imagination's focus from the Santa Claus seen in malls and on television to the exciting and robust history of Santa, a history that goes all the way back to the actual person, Saint Nicholas. Your child might be interested to know that people celebrate Christmas all over the world and that each tradition has its own version of Santa Claus. This will reinforce the idea that Santa is not any one person, but a holiday spirit and tradition that is appreciated by people across the globe.  In many parts of Switzerland, for example, a large parade is held in which people march with artistic representations of Saint Nicholas.  There are instruments, animals, children, and processions in the parade, not to mention the 1700 people walking in the main parade. In the United States, Santa Claus has become a symbol of generosity, jolliness, and giving.  He travels the world in one night, leaving presents under the Christmas tree for all good children. In Austria, on the other hand, children leave their empty shoes outside their bedroom doors or on windowsills to find them filled in the morning by St. Nicholas. Your child is likely to be just fine upon hearing the truth about Santa Claus and will not need reassurance or have an emotional response.  However, some children do feel confused or even betrayed, and that's perfectly acceptable.  Fortunately, if there is any negative reaction, it should not last very long.  Don't force your child to explain why they feel badly.  They might not even know the words for what they're feeling.  Just take the conversation at their pace and encourage them to talk with you. Ask more questions if they're having difficulty talking to you.  For example, “are you upset that Mommy told you that Santa Claus was real or are you feeling embarrassed because you enjoyed the story so much?” This will help you figure out how to direct the conversation. When you explain why you promoted the story of Santa, use “I” language: “I wanted you to experience…,” or, “I hoped that you would…,” or, “I believed that it was best because…”  This language is active and claims ownership, not putting any responsibility on the child. Acknowledge how your child is feeling by saying something like, “I understand that this might feel confusing and that you're upset with me.  I'd like us to talk more about it so that I can explain.” You can also say, “I respect how you're feeling right now and it was never my intention to betray your trust.  I encouraged the story of Santa Claus because it represents what I hold dear about Christmas: kindness, giving, and generosity. I would like very much to talk about your feelings and I want you to know that you can trust me.” Let your child know that they are your biggest priority and that your job is to love, nurture, and protect them and that you would never do anything to violate their trust.  Then explain, again, why you chose to participate in the story of Santa Claus, your interpretation of Christmas, and that Santa isn't a lie, but a mysterious story meant to spread joy. Some parents opt to tell their child that Santa is not any one person, but instead, the sentiment of the season and is really everyone.  You could write them a letter or simply explain to them what the season means to your family, emphasizing that Christmas is about joy and giving. This would be a great time to ask them to be one of “Santa's Helpers,” a person who helps fill stockings and arrange presents for others.
Tell the historical story of Santa. Explain various traditions. Prepare for an emotional response. Choose a middle ground.