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My boy was invited to his cousin's B-day party over the weekend. I invited my friend's son to join my boy so he wouldn't be the only boy at the party, since this was basically an all-girl party. (My boy is 9, the other is 7).
We were only at my brother's place for a few minutes when "Billy" went right to my brother's wallet and started going thru it. I said, "Hey, get out of there, you don't go into people's wallets." He said he needed money for video games. I put my brother's wallet away and left it at that. Now today, as I was cleaning out my car, I realized that the few quarters I had in my change tray in the back seat were missing. We're only talking 50 cents here, but I know for a FACT that Billy took the money.
Now I know to just not leave anything out of value that he could pocket the next time I'm around him, but if my child had these tendencies I surely would want to know. Do I tell her or just let it go?
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I would start by telling her what you actually witnessed, the wallet incident, and then go into the change in the car. I agree with you that he took the change .. circumstantial evidence has put more than one person behind bars .. but it will be a more credible charge coming on the heels of an actual witnessed event.
Be brief and to the point. Don't get into into the whys and wherefores and what she should do about it, and if she denies or gets defensive... don't bite. Just present the facts and tell her.... "I thought you should know." And then exit stage left.
What I would not do is talk to her son yourself, one-on-one. That will be a can of worms I believe you will regret opening. (Think of what might happen when he goes back and tells his mommy what you said to him, which likely will not be an accurate accounting of the conversation). No need to complicate the situation any more than it is .. keep it simple and fact based. It is not your job, no matter how crap of a job his own mother is doing, to teach and guide her child.
Be prepared to lose the friendship, but that might not be such a bad thing right now. If not, you already know what to do when this boy is around... and I would keep "this boy around" as infrequently as possible.
Good luck.