Originally Posted by mamajama
I feel so bad for the little guy
I do think it's your responsibility as a family member to provide a place for him where he is welcome, loved, and allowed to be himself. Does he even have this? If you can't do this then please for his sake let his parents know that you will no longer be having him over in your home. That would be the only other responsible thing to do. I would be really pissed if I found out someone had this attitude towards my kids when they were at their place.
There are 2 distinct problems. One's the taking of the money, and the other's being taken advantage of by the parents. My first responsibility (as the OP's) is to my immediate family. In her case, that's her, her growing little one, and her husband. When taking in someone else's child interferes with that (which really seems to be what's happening here), then that obligation to care for any other children in the family goes out the window. I know because I've been there. It starts as "can you get Joe a sandwich?" and before you know it, you're taking care of Joe all the time because his parents are using you. Then you're left feeling that you shouldn't punish the child for his parents' crappy behavior, but at the same time that if you continue to take care of Joe, then what you're doing is detrimental to your own family. And eventually if you don't stop - even if that means Joe has to stay with his crappy parents every weekend - then you're going to add to the harm being done to this child and to yourself.
And, really I've been putting this 7 YO thing in perspective. In thinking of the 7 YOs I know, only one comes to mind who I think would take something off my kitchen counter. One. The others wouldn't, and they certainly wouldn't go around giving something they took from my house to other people.
Now, does that mean the OP's nephew is going to be a hardened criminal? Of course not, but I think too many people are shifting the blame to the OP for leaving the money out (which shouldn't have been done) and putting absolutely no responsibility on the nephew for taking the money. It was wrong, and yes, he should know better. At 7, he should know not to just take things and pocket them.
The issue of BIL overreacting about the party and hitting the child are separate from the fact that the OP has the right to be upset that someone took money from off her counter. I'm not sure why the OP should in any way apologize for leaving the money out, and it seems at any rate that would only serve to confuse the nephew.