September 25, 2021
A woman found herself in a complicated situation. She wasn't sure if it was okay to borrow money from her children's savings, so she asked other parents how they'd handle the situation and her question sparked an interesting debate.
Borrowing money from kids has become a common practice, and many parents do it without guilt. According to an article in Time magazine, frequenting kids for their savings may breed distrust. It’s almost similar to robbing them of their know-how of money management.
Shockingly enough, nearly one in three parents have admitted to “borrowing” money from their children’s savings. Another survey reported that around half of parents occasionally raid their children’s bank account and are never guilty for having done it. Even worse, half of them never repaid their children.
IS IT OKAY TO TAKE MONEY FROM YOUR KID'S SAVINGS?
A person wrote on Mumsnet asking if it was okay to borrow money from their kid’s instant savings account and even promised a repayment. A user named Ronnie Pickering then replied and reassured them that they don't agree with the practice, but "if you can guarantee it’s paid back, I suppose needs must."While another user said:
“The money has been paid in by the parent, so I see no issue with it as long as the parent pays it back. However, I would be concerned as to why there was so much debt built up in the first place and has the issue of spending so much beyond their means been dealt with.”
An argument in favor of borrowing finances from your kids is that it can be considered your money. You’re their legal guardian, and you’re also responsible for everything they own. So should you just take it, or would it be better to ask your child's permission before dipping into their savings?
ALWAYS ASK PERMISSION BEFORE YOU BORROW
One parent faced a similar dilemma when considering using some of his children’s savings towards a new home. His wife disagreed and told him they would never repay their kids. He posted an open question on The Guardian asking what other parents would do in a similar situation. One person named Jill le Neve Johnson replied:
“I couldn’t believe this question when I read it! Child benefit is given to help with the expense of bringing up children. I, like millions of others (and my mother with me), spend it on their children,”
Asking permission before you borrow money from your kids is advisable because it portrays you as honest. As long as your child is old enough to fully understand what's going on then it's okay to ask them. But if your child is too young to know what you're talking about then discussing it with them would be impossible.
IS IT COMMON FOR PARENTS TO TAKE MONEY FROM THEIR KID'S SAVINGS?
If your kid is in primary school or older, you could explain your situation and ask them if they’re willing to help. Some parents feel that being straightforward is better than taking the money without their children’s consent. Sometimes, parents have no choice but to make a candid request and see nothing wrong with that.
A parent explained their story on Today’s Parent, emphasizing that they’d never borrow money from their children without their permission. “I borrow money from my kids. And until recently, I never saw anything wrong with that,” she added:
“I have never taken from them without permission, and I’ve never borrowed what I can’t payback. But, over the past six years, I have also never hesitated to ask either of them for money if I’m short.”
Times are unpredictable. Households struggling with bills and debts usually have limited opportunities for finances and are forced to use their savings. According to The Independent, one-fifth of parents borrow money from their kids’ savings to pay for living expenses.
The study emphasized parents raided their children’s savings to provide for their household living costs. Researchers polled around 5,000 parents and found that one-fifth of them borrowed finances from their kids’ piggy bank and savings accounts to pay for their living expenses.
Jody Coughlan, a money manager at comparethemarket.com, said that parents need to ensure that they’re able to afford to give their kids pocket money without dipping into it to cover their household bills. People on Quora once emphasized if it was okay for parents to ask for money from their children’s salaries.
Several people from the online community shared their mixed opinions about the matter. While some claimed it’s okay to borrow from children as long as parents can repay them, others were totally against the concept. One person commented against the idea, saying that saving money is a learning factor for kids, and added:
“If you take away their money, you’re taking away a super important life lesson, especially when your child does everything they can to earn the money.”
Other parents believe that since they're responsible for putting money in their kid's savings, they don't need to ask for permission to take it back.
THE IMPORTANCE OF MONEY
If you take money from your kids when they’re young, they may be more likely to take money from your wallet when they’re older. They may assume that taking money from family is normal. You may be setting a bad example for your kids without realizing it.
However, having an open conversation with children about money can help you can function as a parent. You can learn to help your kids build a healthy relationship with money and let them know the importance of it in today’s competitive world.
Have you ever borrowed money from your kid’s piggy bank? Many parents have. They think this is a delicate situation while others see it as morally disgraceful, similar to stealing money from the needy. “It’s my money, anyway,” claim some parents while trying to justify their situation.
Recall your childhood and how your parents helped you to equate money and finances to it. Were you frugal? Did you spend on things that weren’t necessary? And are you okay about borrowing money from your kids despite knowing that you seeded it for their future? Start the conversation today! Thanks for reading!