Having an active nanny who runs errands, grocery shops, and takes children to fun places like the zoo or children’s museum means that your nanny will need money to spend while he or she is on the clock. For many families, figuring out how to cover these expenses in a way that is easy and convenient for everyone can be a challenge. Is it better to give cash? Get a gift card? Reimburse the nanny?

It’s important to have a system in place, not only for covering small daily expenses but also for planning for upcoming expenditures and reviewing the nanny’s monthly purchases. One of the easiest ways to do this is by getting your nanny a credit card. A nanny credit card can be used solely for paying for job-related expenses, like zoo admission or food costs. Each month, families can easily pay off the balance, rather than requiring the nanny to cover expenses with his or her own money and then wait to be reimbursed.

While many nannies do get reimbursed for mileage or cell phone costs, reimbursement is not generally the best way to handle daily expenditures because it functions on the assumption that the nanny has the extra funds to cover the cost of children’s activities or the family grocery bill. Then the nanny is left waiting for those funds to be recouped, and that can be stressful for the nanny.

How does a nanny credit card work?

The nanny credit card can be any card of your choosing. While the nanny will be the one making use of the card, the bill should come to you. Before the nanny starts using the card, families should create guidelines about when the card should be used and the weekly or monthly spending limits. For some families, it may be a good idea to set an activity budget that outlines specific amounts that can be spent each month on recreation, entertainment, and errands, just so the nanny is clear on what they are allowed to spend and can plan accordingly. If nannies want to treat children to an extra special activity or outing that goes over budget, they can clear that with you beforehand so there are no surprises on the bill.

In addition to the guidelines and budget, nannies should also have a designated place where they can store receipts. There are actually a number of great apps that make this really easy. One is called Zoho Expense, which allows users to scan up to 100 receipts per month for free. You can also pay a monthly subscription fee to get additional scans. The app can be used to track mileage as well, if that’s a necessity.

Another app, Expensify, allows users to easily scan receipts via cell phone or import them directly from credit cards to create custom expense reports. The app also works with Quickbooks and Freshbooks, so you can easily incorporate the nanny’s expenses into your existing budget if you use either form of accounting software.

Whether you use an app or simply ask the nanny to submit paper receipts, it’s important to review expenses regularly and make sure your nanny’s account is being carefully tracked and managed. Many families have a nanny binder, where they keep important information and paperwork for the nanny and where nannies can file their receipts.

What if I don’t want to provide my nanny with a credit card?

If you’d prefer not to give your nanny a credit card, you can provide them with petty cash instead. As with a credit card, you should discuss what the money is to be used for and set spending limits with your nanny.

Cash can be disbursed weekly, biweekly, or monthly, depending on the individual needs of your children and nanny. It’s also important to ask nannies to provide receipts for all expenditures so you can track where the cash is going and make adjustments to the budget or spending guidelines as needed.

Ultimately, spending money is just one more tool your nanny needs in order to be able to do their job well. As long as you and your nanny are on the same page regarding how much he or she is allowed to spend, what the money should be used for, and how to track expenses, the “right” system for your family is the one that feels clearest and easiest for you.