Conrad also shares a look into their family's holiday traditions, adding that Liam is "not thrilled" about Santa

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Now that her son is getting older, Lauren Conrad is looking forward to creating her own family holiday traditions!

With their second Christmas as a family of three around the corner, the former reality star, 32, is opening up about how she and husband William Tell are planning to spend the holiday with their son Liam James, 17 months.

“He’s still so tiny,” Conrad, 32, tells PEOPLE, explaining that she and her husband “haven’t really developed” their own traditions yet.

“Last year, he was only 6 months so we were still such new parents figuring it out,” she says, adding that it’ll be “really fun” to “make up our own” annual traditions. “We’ll probably start developing them in the next couple years to be honest.”

Although Christmas usually involves spending “a lot of” time with both her and her husband’s families, who live nearby, Conrad shares that “this year we’ll actually do Christmas morning with just us, which I’m really excited to do.”

Looking ahead to Dec. 25, the fashion designer, who recently launched a new LC Lauren Conrad collection for the holidays with Kohl’s and gift collection with her Little Market brand, explains that she looks forward to seeing her son open “all of his gifts” and having “a nice quiet PJ morning.”

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As her son is still so young, Conrad explains that he doesn’t quite understand who Santa Claus is yet, and why he has to take a picture with him every year.

“He’s fine with Santa,” Conrad shares, adding that Liam has already gotten his picture with Saint Nick this year. “He’s not thrilled about it, but he’s not bad.”

“He just looks very confused in every photo because we just handed him to a stranger. He’s not really sure and doesn’t understand that he’s the guy with the gifts,” she shares. “I think in the next couple years, he’ll be more excited about [it]. Right now, he’s just confused.”

Credit: Lauren Conrad/Instagram; Inset: Scott Kirkland/REX/Shutterstock

While it can be tough to baby-proof a house no matter what time of year it is, Conrad shares that she actually put a baby gate around the family Christmas tree this year!

“We have a tree in our house but I put a gate around it so he can’t touch it,” she tells PEOPLE, explaining that she “only did it because all of my ornaments are like dishes” and she doesn’t “want him to cut himself.”

“It’s really for his own safety,” she continues, adding that she actually bought that baby gate “specifically” for the tree.

“The dogs were messing with my tree and I’m like no, not this year,” she remarks. “No one go near the tree. We can all admire it. It’s in a big window, it’s fine.”

The proud mother also reveals that her son “loves” all the decorative Christmas lights.

“We walk around the neighborhood looking at all the lights. That’s very exciting for him,” she says.

Credit: Lauren Conrad/Instagram

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Opening up about her son’s latest milestones, Conrad shares that Liam, who’s “in his imitation phase” is “getting really chatty.”

“We’ll be talking and saying words to him and he’ll repeat a word and then refuse to say it again,” she says. “I think he’s starting to understand the power he holds in this. He’s getting a little sassy in a good way. He’s catching on. he’s a smart kid and putting things together.”

Conrad also says that even though her son “said Dada before Mama,” she can tell he’s already taking after her.

“If I ask him, he won’t say Mama, but I know he knows how to say it because he’ll say it when he wants something,” she says. “He’s learning that he can withhold things. He’s stubborn like I am. I deserve it! We’ll have our whole family over and he decides who gets a kiss and who does not and it’s very funny.”

Asked how she felt that her son hadn’t said “Mama” first, Conrad laughs: “I was just excited that he said a word, honestly … I think kids say Dad first because the d sound is easier. I was prepared for it!”