Or…you could do what we did.
From the very beginning, we told our children, "On Christmas, we pretend that there’s a Santa Claus and it’s SOOO fun that even the grownups, not just the children, pretend that he lives at the North Pole and rides a sleigh through the sky, and has elves and reindeer, and brings presents…it’s the most fun pretend story of all and we do this in our family, too!
Same thing for Easter Bunny, Tooth Fairy, and any other childhood myths. It’s FUN to pretend! Actors make a living pretending!
We never said, “Santa exists,” except to explain (even as Protestants) that there was a saint named Nicholas who brought dowries to young women, and that’s where Santa Claus got started–people created a pretend “St. Nicholas” character to honor the real saint.
We did tell our children that some people really believe in Santa, especially some children, and so they need to be kind and not try to tell these people that Santa doesn’t exist. That’s not loving at all, it’s mean.
This worked out just fine for us. I am wise enough to know that little children do not always discern what is real and pretend, and I’m pretty certain that they believed in Santa with all their heart when they were little. But as they got older, they were used to hearing that Santa was pretend, so there was no big let-down when they got older. They started understanding what we were saying, and the joy over “pretending that there is a Santa” was and still is there!
BTW, my older daughter was obviously a “theater kid” growing up, and she has worked in the entertainment business all her life so far. She has a Master’s Degree in the field in which she works. And she makes a decent living at it. So all the “pretend” was good for her–it helped her to find her life’s work! She now “pretends” for a living!
The other daughter is in a medical field, but she still gets involved with pretend every Christmas, as she produces a huge “Nutcracker” that attracts a large audience and many community members.
I hope this is helpful. I know not every family feels comfortable with this approach, but it really worked well for us. Come to think of it, I think this is what my parents did with me and my brother.