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Is There Really a Santa?
7 Tips to Help You Answer the Santa Question
By Thomas Haller and Chick Moorman, authors of The 10 Commitments: Parenting with Purpose
3. When children want to know about Santa, tell them the truth.
Having already followed the two previous suggestions, this is no place to attempt to preserve the mystery. Be open, honest and gentle with your words. Remember, you are uncovering a lie that a large percentage of the entire family (not to mention a large percentage of the population) helped you keep. 4. As you begin your explanation of why Santa was created, focus on the importance of giving.
Move the attention away from Santa, and concentrate your discussion on the idea of giving from the heart. 
This could also be the time to talk about your family's religious views. Explain the "reason for the season" from your family's moral, ethical and religious point of view.
5. Acknowledge your child's emotional reaction.
She may be angry, hurt or sad that her parents have been lying to her for years. She may be disappointed that there is no Santa. Don't make your child feel wrong for having these feelings. Console and comfort her. Communicate empathy by saying, "I can see you feel sad about this" or "This is really a big disappointment for you, isn't it?" Allow your child to grieve the loss of a fantasy and a loss of part of her childhood. Inviting your child to write in a journal or draw a picture to communicate her thoughts and feelings is useful in this situation.