Money Tips for Nannies and Childcare Workers

Money: Managing a Sensitive Family Subject   

As a working or aspiring nanny, you’re in a unique position. You’re a professional—and yet, you’re also exposed to far more personal details of your employers’ lives than other professionals will be. Chances are, you’re going to see your employers in their bathrobes and slippers, with unkempt hair, and before they’ve had their morning coffee. And vice versa! That’s not something workers in other industries often contend with. Working a nanny job you’re likely to get into fairly deep conversations about family values, since you will be looking after young and impressionable charges. Parents want to understand and, in many cases, control the kind of information and moral teaching their kids will be receiving. These can be difficult conversations but it’s critical you engage in them, of course. You’re also likely to have to connect with your employers on another subject that many people find awkward to talk about: money. Don’t worry—you can do it! But let’s look at a few ways you can make it easier on yourself and your employers.

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Tip #1: Don’t Wait

Some employers will handle the subject of money directly as soon as you begin work. They may mention that you’ll receive a monthly allowance for any purchases you make on the family’s behalf. These expenses may be incidental: a package of nappies or a brush for baby’s bottles. But some nannies are expected to do the family’s grocery shopping, which will amount to quite a bit more. Some families will keep a “petty cash” box in the house for you to draw upon for these expenses. Others might provide you with a debit card that’s attached to a bank account created for the purpose of paying for household expenses. If your employer doesn’t bring the subject up, the first time you’re asked to handle any money that belongs to them, discuss how money will work between you.

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Tip #2: Get the Details

When you talk about money with your employer, it’s best to get specific. Knowing your employer’s expectations from the outset can help prevent misunderstandings and problems down the road. For example, does your employer expect you to keep receipts for any purchases you make? Are you free to take money from petty cash or do you need to ask permission first? In an increasingly cash-less world, your employer may provide you with a debit card and account of your own to use for kid-related, grocery, or other household expenses. Will you reconcile the account together when the monthly statement arrives?

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Tip #3: Get Paid Properly

It’s not uncommon for families to suggest that they pay nannies “under the table” without filing the required government paperwork and without deducting taxes from an employee’s salary. That may be convenient for them and tempting for you if it’s offered. But it’s never a good idea. Being an official employee provides you certain protections that may have value well beyond the few extra pounds an off-the-books arrangement would put in your pocket. In many countries, these benefits might include some sort of unemployment compensation if you lose your job. In the UK, the payments you receive are called a jobseeker’s allowance. In the US, it’s known as unemployment insurance. But the terms and conditions of this kind of benefit vary by location. The amount you receive and the length of time you receive it may be different based on where you work. Be sure you understand the rules in your country of employment before accepting a position and that your employer is abiding by government regulations. You may also be required to show proof of employment periodically to maintain your work visa. 

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And speaking of benefits, depending on where you live, you may need to have a private health insurance policy in place to help offset medical expenses you incur. Be sure to ask your employer if he or she will pay for this crucial safety net or if you will be covered by the national health insurance plan of the country where you’re employed. If not, you may need to research and budget for a plan yourself. 

Tip #4: Saving is Smart

Although your employer may pay you a salary or hourly wage, once you receive your wages, it’s up to you to manage your money. That means setting up a realistic budget for yourself. You can start by making a list of all of your essential expenses—the must-haves. If you’re not living in your employer’s home, that will include your rent and utility bills, of course. If you pay for your own cell phone and internet plans, those are other essential expenses. The same goes for any student loans or credit cards you may be paying off. Next, make a list of your discretionary expenses—the nice-to-haves. These may include restaurant and entertainment expenses or a new pair of boots now and then. The final category for your budget should be the money you save rather than spend. Financial experts often recommend a 50-30-20 budget framework: 50% for essentials, 30% for discretionary, and 20% for savings. 

If you discover you will be spending more than 50% of your salary on essentials, you may need to reduce your living expenses by finding a cheaper place to live or a cheaper phone or internet plan. Or you may need to reduce the amount you budget for “nice-to-haves.” But you should not skimp on savings. First, it’s a good life-long habit to get into. Second, everyone should have—though many people don’t—an emergency fund. 

The best savings account for you may be one with a bank located in your host country. But there are a number of banks that operate internationally and you may decide to open one of those instead. In any case, choose a bank that offers robust online banking options, including a mobile app. Online banking affords you more flexibility and convenience. If you open a checking account in combination with your savings account—something you might need to pay bills—look for one that offers no-fee or reimbursed fees for foreign transactions. That’s particularly important if you expect to travel internationally with your host family, which is not uncommon in the nanny field. 

Tip #5: Be Your Own Best Friend

Being a nanny may be a part-time or a full-time job. But even a full-time job can become too full. When you work in someone’s home and don’t punch a time clock, it’s easy—particularly when you’re trying to be flexible and meet host family’s needs—for the line between time-on and time-off to become blurry. If you find that’s too often the case in your host family’s home, it’s best to bring it up politely and ask for some clarification about your hours and duties. Usually, a gentle reminder is all your employer will need. It’s important to look after yourself. Being a nanny can be a very rewarding experience but you want to be sure you’re being financially rewarded in keeping with your contract, too. 

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Author Bio:

Susan Doktor is a journalist and business strategist who hails from New York City. She writes on a wide variety of topics, including finance, travel, and workplace issues. Follow her on Twitter @branddoktor.

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