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The wife and I told my oldest daughter when she was about 7 or 8. She was pretty shocked, and said "OK", but was pretty quiet about it. A little while later she came up to me, tears in her eyes, and said, "I don't think I was ready to find out that Santa wasn't real." That kinda bummed me out. However, I think if I hadn't told her and she found out thru friends, she woulda been twice as bummed, and probably humiliated on top of it.
I have the next daughter (8 years old now) who I'm debating whether I tell her this year... she still believes, and the older daughter (now 11) is doing her best to keep her believing.
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