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Christmas was costly and now there is no money for the mortgage. Can you dip into your kids' financial gifts to pay?
Yes you can, and apparently you will be one of many parents who indulge in the practice. About one-third to one-half of parents surveyed in polls in 2014 took money from their children's piggy banks and savings accounts to pay for routine monthly expenses and even extras like vacation, according to Time magazine.
Tough Times, Tough Talks
It's not illegal to take money from your kids in most cases, although, of course, there are exceptions, like if the child's money is in a specific trust and you abuse the funds. And it is arguably fair to feel entitled to the tykes' capital -- after all, you work hard to support them, and in some senses, all their money is rightly yours.
But dipping into the children's money without discussion can be a problem, and it does send some strange messaging. "The big issue is that often the money is taken on the sly," per Time. "Yet an explanation of whether or when you will replace the money goes a long way. Simply confiscating your child's funds sends the message that it's okay to take whatever you need. Don't be surprised to find your kids, as teens, lifting $10 bills from your purse or wallet."
Pinching the kids' money in a pinch without talking about it also indicates that money is a taboo topic. While it may once have been considered rude to talk about finances, Americans today have to be very savvy to survive. Being shy about your difficulties or sly about needing money tells your kids that they will have to use similarly sneaky means to survive, too.
Lemonade From Lemons
The moral of the story here is not that children's bank accounts should remain untouched while parents scramble madly to pay for necessities. Rather, it is that you can turn your need into a teaching opportunity, a chance to initiate frank discussions with your children about life and money.
Many parents prefer to keep kids sheltered from difficult realities, wanting childhood to be a happy time. But functional adults don't grow in a vacuum. Talking to your kids in a calm and cool manner about managing difficulty is an invaluable lesson that will serve them long into adulthood.
Consult With Counsel
If you are a parent or grandparent interested in setting up a trust for your children, or otherwise managing an estate, consult with counsel. An estate attorney can explain your options and help you make arrangements that are good for the whole family.