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How to handle tricky money conversations as a nanny or babysitter

From pay rate discrepancies to reimbursement issues, here’s how to navigate sticky financial discussions with your employer.

How to handle tricky money conversations as a nanny or babysitter

It’s a topic nobody loves broaching, but when you’re a nanny or babysitter, the subject of money is unavoidable on the job. While bringing financial concerns, issues or questions to the table with your employer can feel awkward, to say the least, it’s a crucial element in job happiness. 

“Money conversations are the toughest ones to have, but also the most impactful part of whether a job will be sustainable,” explains Emilly Dills, founder of National Nanny and Seattle Nanny Network. “Because of this, it’s critical to get the conversation right from the start.”

From dealing with pay rate issues before they arise to tackling reimbursement matters after the fact, here’s how to have tricky money conversations as a nanny or babysitter.

“Money conversations are the toughest ones to have, but also the most impactful part of whether a job will be sustainable.”

— Emilly Dills, founder of National Nanny and Seattle Nanny Network

Setting the stage for money conversations

The subject of finances can feel more taboo than politics — particularly when you’re discussing them with the person who pays you — but tackling the topic on the front-end can spare both you and your employer a substantial amount of discomfort, awkwardness and potential misinterpretation. 

“When we avoid money conversations until we have to address them, such as after a payment is late, it is much more difficult than being direct and upfront,” says Lindsay Bryan-Podvin, financial therapist at Mind Money Balance. “Both parties tend to make assumptions and jump to conclusions, so it’s best to be clear and kind from the beginning.”

Additionally, be sure expectations around rates, payments and all things money are covered in your nanny contract.

“When we avoid money conversations until we have to address them, such as after a payment is late, it is much more difficult than being direct and upfront.”

— Lindsay Bryan-Podvin, financial therapist

Communication tips for discussing money with your employer

In addition to the overall notion that it’s best to discuss money early on, there are a number of communication tactics to employ when navigating this tricky topic. Here’s what Dills and Bryan-Podvin suggest:

Consider your own (real) needs and ask for them

Don’t sell yourself short. Figure out what you actually need to earn and say just that. “The cost of living is real, and with nannies in demand, you have the right to ask for what you need with a greater chance of getting the result you want,” Dills says. 

If you’re working with an agency, Dills says to make sure the agency understands your wage expectations before they send you to interview with any of their family clients. “Ask the agency what they are doing to ensure the family they are sending you to meet with has a clear idea of your needs before you meet them.”

If you’re working directly with an employer, Bryan-Podvin says to be clear. “You can say: ‘I charge $X per hour for 1 child, and $X per hour for each additional child.’” Beforehand, you can research the going babysitter rates or nanny rates, and be prepared to negotiate if need be. 

To find out the hourly rates babysitters or nannies are charging in your area, check out our cost of care calculator.

Get it in writing

Once you have an agreed-upon hourly rate, get it in writing — “even a text or email” — before you draw up your contract, notes Dills. “Anything you can point back to once you’ve agreed to a job and negotiation begins will be helpful,” she says.

Clarify how you’d like to be paid

Venmo? Zelle? Check? Cash? Everyone has their preferred way of being paid, and there’s no shame in sharing your preference outright. Before you start, let your employer know which payment platform works best for you, notes Bryan-Podvin.

“Be direct,” she says. “You can say: I require my fee at the time of service via check,’ or ‘I like to be paid at the end of each week by this mobile payment app.’” 

Consider a script

Even if you’ve recited what you’d like in terms of payment a hundred times to yourself in the shower, you may get nervous when it’s time to discuss this with your employer — totally normal!

“If you feel anxious about saying any of these things, put them in your notes app and read them off or send them via email,” Bryan-Podvin says. “Plus, most parents respect the clarity of your fees, and it looks more professional to be prepared with financial policies in place.”

Common tricky money situations and how to deal with them

Let’s dig a little deeper. Chances are, even if you’ve done your due diligence and broached all the subjects up front, discussions around money are likely to come up — be prepared for those, too. 

Here are some of the most common sticky money situations babysitters and nannies find themselves in, along with tips for how to react. 

You don’t think the initial offer is fair

While it’s important to get your rate nailed down before you start, there’s also the issue of nailing down the rate you want. “If your expectation is for a higher rate than what you’re offered, explain that your expectation is based on your budget, and there is not much room to deviate from that, regardless of how great the job is,” says Dills.

Dills also notes that it’s helpful to steer the conversation away from why they may be offering you a lower rate. “For example, if they are justifying a lower rate with ‘My kids are easy’ or ‘I have only one baby that sleeps a lot. It’s not hard work,’ try pointing out to them that your rate is based on your cost-of-living needs. You have a budget, and you must adhere to it, or the job may not work out for you both in the long term.”

Your payment schedule is unreliable 

Ultimately, the shared goal for you and your employer should be to find a reliable, long-term payment schedule. “Without knowing when you will be paid or have a consistent number of hours to rely on, you are potentially creating an unsustainable situation for yourself, and ultimately, them,” explains Dills.

Dills advises, again, to keep the focus on you. “Just as the family has bills they need to pay, you can gently let them know you have carefully budgeted for what you need as consistent and reliable income to cover your bills,” she explains. 

Reimbursement for expenses incurred on the job

Ice cream outings, trips to the zoo — kids’ activities aren’t free, and sometimes you wind shelling out your own money for a fun afternoon. 

Dills recommends working out reimbursement logistics beforehand, but if you don’t, it’s not the end of the world. 

“Let them know that in the past you have worked out arrangements for reimbursable expenses, and you want to know before you begin, what the rules will be for working with their family,” she says. “Ask if they’d like you to collect receipts and set the expectation for repayment within a certain period of time after the event, or they can set aside a petty cash fund that you can tap into.” 

If the subject wasn’t previously broached, Bryan-Podvin advises asking the following before or even after an outing: “Do you have a credit or debit card that I can use for expenses, such as gas, snacks, etc. or do you prefer that I track those expenses and you reimburse me later?”

Whatever route you take, always be sure to provide receipts for expenses. Also, Dills notes, be sure to talk to your employer upfront about what expenses are acceptable and what amount of expenditure would require pre-authorization.

Overtime, holiday pay and additional compensation

First thing’s first: Be sure to get clear on your state’s overtime policy, as they’re quite nuanced. For instance, in Alaska, California and other states, overtime kicks in after eight hours worked in one day, whereas in Washington, Connecticut and others, it kicks in after 40 hours worked in one week. 

Second, Dills notes, “don’t assume that because nanny and babysitting care is largely unregulated, that these protections don’t extend to you.” 

In terms of having the conversation with your employer, be direct and honest about what you need. “Approach overtime from the position of what you need to make the job work, not necessarily what is being offered,” she says. “Most employers want to do the right thing.”

In almost all cases, if your earnings exceed the annual income threshold for the year, you are considered a household employee under the law. That means, in 2024, if you earn $2,700 or more throughout the calendar year, you should expect to be paid legally just like everyone else in the professional working world.

It is your employer’s responsibility to make sure you’re paid correctly, but it’s also important for you to understand tax and payroll essentials. For example, if a hiring family tells you they’d rather not pay nanny taxes or implies they’re helping you out by letting you bring home a little extra cash, they may not realize it’s illegal to do so, and you might need to have a conversation about legal pay. 

Being paid on the books is not only the law, but it also provides you with several important benefits and protections, which help secure your financial future.  

Read more:

What to do if your employer won’t pay you legally

Raises and performance reviews

Generally, reviews are annual, with the first one being a year from the day you start. The expectation should be a 3-5% rate increase in order to keep up with the increased cost of living, explains Dills. 

That being said, if you’re hoping for more, “be prepared to demonstrate that you’ve performed at a level that warrants the ask,” Dills explains. Consider having all the ways you’ve gone above and beyond documented in your Notes app or on a piece of paper.  

Either way, though, performance reviews are helpful for both parties. “It allows the family and nanny to have a meeting of minds on what has gone well, and where improvement is needed,” says Dills. “It’s important to communicate about everything — not just money! — in order to encourage growth and sustain the relationship for the long term.”

The bottom line

The ideal way for nannies and babysitters to approach tricky money conversations is before they ever happen, but if that’s not possible, it’s best to be direct and keep the focus on what you need in order to make the job work. 

It can be an uncomfortable topic, but, Dills notes: “The more clear all parties are going in, the less chance there is for a misunderstanding to arise.”