i told my kids that the santa story started because of a real person who lived a long time ago (st nicholas) who helped children, and so people like to pretend that he is still around, giving gifts to children at christmas time. in our belief system, there is an afterlife, so while my children understand that st nicholas lived (and therefore died) a long time ago, they remind me that his spirit didn't die.
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i've told them that some people like to pretend or even believe that santa is still alive, as a person who lives on earth, and we need to respect that by not telling them he's dead (pleeeeeeeeeeeease don't say "santa's dead!"). ds1 said, "well they need to respect our beliefs!" and i told him that it doesn't hurt us in any way that they say santa is real/alive, but it does hurt them if we say he's not real/dead. he accepted that line of thinking.
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and all that being said, they still get really into santa, the naughty list, like to talk about what santa will bring them (even though they know it's nothing, or perhaps an intangible "christmas blessing"), and remind me that "santa's watching" all the time, lol. they still love the magical aspect of it no matter what i've told them.
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so imo, whether you want to do santa and ex doesn't, or vice versa, you can tell them what's what, without losing the magic. even if you don't believe in an afterlife, you can still point out that real people behave in the spirit of st nicholas or the spirit of christmas, by volunteering, sharing, and bringing cheer with their pretty lights and songs.Â