Household accounts, when an employer makes funds available to the nanny for expenses, isn’t a necessity in all jobs but they do make life a lot easier for the nanny and employer.
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 and the current balance. She should also keep all receipts in a central location.
Posted by Setting up a Household account – Setting up a Household | Household Supplies on December 22, 2011 at 12:13 pm
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Posted by Janice on March 23, 2011 at 8:00 pm
Sometimes the account is just for discretionary spending for outings with the child: museum entrance fees, snacks, and such. The account should pay for the nanny’s fees and meals during such approved outings, as they are part of the job. It’s a greyer area, and up to the parents, whether they’re comfortable paying for her ice cream or other treats during a dedicated treat outing.
I’ve heard there are credit cards with a low limit that parents can use for nannies. I think the set-up is the same as the debit card for teens, and that it’s designed for teens to be able to use a “safe” credit card just like the debit card you described. That would have the added benefit of listing the point of purchase for each use in the card statement. Although I’d still save receipts to prove that the items purchased were child-related.