Household accounts, when an employer makes funds available to the nanny for expenses, isn’t a necessity in all jobs but if your nanny will be taking your child on outings where an admission fee or lunch is involved or she’ll be purchasing anything for the home such as food or baby supplies, it’s standard within the industry to set up a household account.
These accounts can be used for emergencies (e.g. we’re out of diapers!), for convenience (e.g. a milk and bread run), for running the household (e.g. stock up trip to Costco) and/or managing the family (e.g. buying school supplies, contributing to the teacher gift).
There are 3 ways employers can handle a household account.
Cash The simplest way to set up a household account is to keep cash on hand. The cash system works best when the nanny won’t often need money and when she does, will spend small amounts.
Credit Card Providing the nanny with a credit card is the most convenient way of setting up a household account but also offers the least amount of control over spending. The credit card system works best for families that rely on their nanny for household / family management tasks where large or frequent purchases will be made.
Debit Card Providing the nanny with a debit card is a great combination of convenience and control. Most banks offer debit cards geared towards teens that are perfect for nannies too. Employers can transfer funds into the nanny’s account without giving her access to theirs. Employers can receive spending and low balance alerts and customize the spending limit. The debit card system works well for all situations.
Regardless of how the household account is set up, the nanny should keep an accurate and up-to-date balance sheet detailing deposits, spending andthe current balance. She should also keep all receipts in a central location.
It’s essential to discuss your spending habits with your nanny before she accesses your household account. This is a very personal issue and every family has their own version of “reasonable spending”. For some families, spending an extra $15 or $20 for cut fruit is a smart, time saving move. For other families it’s a complete waste of money. Your nanny won’t know which camp you fall into unless you clearly tell her.