Is it OK to borrow money from your child’s piggy bank to buy a house?

“We’re going to have to tighten our belts a bit,” my husband told the kids one Saturday, after informing them that no, we wouldn’t be going out for lunch.

It was a bit of a rude shock for them. We had been living the good life, regularly eating out and often treating the kids to a new book or a magazine just because.They had gotten used to a rather privileged lifestyle and they weren’t keen on giving it up.

We explained to them that buying a house (they’ve been calling it our “forever house”) was going to be very expensive – much more expensive than renting.

“It means that things like cafe lunches will be a treat – not a habit.” I explained.

A few days later my daughters turned up in the kitchen with their school banking books. “You can use our money to buy the house,” said the eight-year-old.

“We don’t mind,” agreed the six-year-old.

It was really sweet. They had obviously talked it over following the “tighten our belts” conversation. Part of me was happy; it meant that they had understood that things were going to be changing.

Another part of me felt a little sad. Surely they were far too young to be sharing the burden of financial responsibility. 

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I dismissed their offer with big hugs and laughter. I ruffled their hair and told them to put their banking books away. But later, while they slept, I reconsidered.

It was definitely tempting. Thanks to the generous contributions of their grandparents the girls have a tidy $5000 between them. It wasn’t enough to put a dent in the mortgage, but it would go a long way in covering the other expenses of the move. It was enough to ease the financial stress a little.

Don’t be too shocked. A recent poll from the UK found that one-fifth of parents have borrowed money from their kids piggy bank and savings.

The research, which was commissioned by comparethemarket.com as part of a report on pocket money, found that nearly half of those that have taken cash out of their child’s savings had done so to pay household bills.

While it might sound a little grim, the same survey found that parents were being pretty generous with the amount of pocket money they give. The general consensus (according to the survey) seemed to be that is it OK to borrow it, as long as you give it back.

A positive thing to come out of all this piggy bank raiding is that parents are talking to their kids about money more. “It’s incredibly encouraging to see the number of parents who are willing to talk to their children about financial management from such an early age,” said Jody Coughlan, a money manager, at comparethemarket.com.

“Not only will this do more to prepare them for financial responsibility in the long run, but it should also help to lessen their long-term dependence on the ‘Bank of Mum and Dad’ as a result.”

I’ll admit that I thought long and hard about borrowing money from my kids. But in the end, it just didn’t feel right. Although the bulk of their funds came from their grandparents they have also been regular attendees at school banking. They’ve watched their savings increase and the thought of turning the total to zero filled me with sadness.

So my kids’ bank accounts remain untouched. They get to hang on to their savings for a rainy day (I’m thinking a post-high school gap year) and I get to sleep at night without the guilt of stealing from my children. A win/win in anyone’s book.