Chloe Knutson sneaked into the locked bedroom of her gran and helped herself to the cash hidden in a safe in her wardrobe.
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A court heard the 18-year-old pocketed the money to spend on "legal highs, alcohol and maybe a new pair of trainers".
But, her devastated grandmother became suspicious when she returned to her Newcastle home and realised the cash had been stolen, Chronicle Live reports.
The police were called and Knutson, of Haig Crescent, Scotswood, was arrested and found to have £2,900 stuffed down her bra, the court was told.
In interview, Knutson said: "I was sick of not having any money and I knew my grandmother had some, so I thought, **** it."
The teenager appeared at North Tyneside Magistrates' Court where she pleaded guilty to one charge of burglary of a dwelling.
Giving her an 18-week prison sentence, suspended for 12 months, and ordering her to do 150 hours of unpaid work, District Judge Bernard Begley said she was lucky she wasn't going straight to prison.
He said: "Hopefully you have realised how mean an offence this is.
"Anybody who burgles property from another person is mean but it is worse when they know that person or they are related to them."
The judge added: "There's no doubt this offence, despite the guilty plea, attracts a prison sentence.
"You're effectively being trusted by your grandmother and you have abused that trust."
Lee Poppett, prosecuting, said Knutson stole the money while her grandmother was out.
He said: "The complainant says her bedroom is upstairs in her house. Inside of that is a wardrobe and inside that is a safe.
"That safe isn't big but there about £3,000 in it.
"She was saving the money for her brother's funeral and for her own funeral.
"In front of the safe, there's a number of jumpers, so nobody can see it from a casual glance inside."
The court was told the grandmother had left her home on January 19 and returned a few hours later to find the safe missing.
Mr Poppett added: "The complainant noticed the wardrobe door was open and straight away checked for the safe and noticed it was not there.
"At that point, she began to cry."
In a victim person statement, Knutson's gran said: "When I noticed the safe was gone, I felt physically sick.
"I got really upset and I felt as thought I'd let my brother down as some of the money is his.
"I feel very let down by Chloe. I have tried to help her."
Stephen Moore, defending, said Knutson, who has no previous convictions, had led a difficult childhood and had turned to psychoactive substances, formerly known as legal highs.
He said: "She's only 18 and has no previous convictions. She's got things to deal with I expect have never been spoken about.
"She's committed this offence, which, I think, is to do with that background but she's said it was because of legal highs.
"It's clearly a distressing offence for the grandmother but she wants to see her granddaughter get help."