My Dds are 3 and 4 and they think that Santas elves make toys for all children and that it's all free and magical. All you have to do to receive these toys is be good. Aibu to burst this bubble and explain that adults have to pay for these toys and that some children are not as fortunate as them and make them clear out all there old toys to give some away.
I want them to understand that there are kids less fortunate then them but don't want to take the shine off the whole Santa thing.