It depends on the age.
Your child got or worked for the money and it is unfair to take it away. Punishing the child in this way will hurt him or her seeing as they won’t want to work for things.
Seeing as we are talking about borrowing, usually when you borrow something-you are returning it. If not it is not called borrowing, it is called taking.
How would you feel if someone just took your money and claimed they would give it back?
Children have feelings too, even if according to halacha you can take it, it will definitely not make your child’s relationship with you any better. It will not help them become a better person.