From Children to Checkbooks: Financial Planning for Nannies
Nannies spend so much time looking after other people that their own needs can often go neglected. But if there’s one thing that nannies need to look out for, it’s their finances.
Creating a livable budget, planning for emergencies and saving for retirement are crucial aspects of financial planning for nannies. Being employed at a large company often means tax payments are automatically deducted and benefits like a 401k or other type of retirement savings plan are built into your employment package. But that situation may not be the case with individual families you work for.
It’s your responsibility to take charge of your financial future.
Nannies face special challenges in the financial realm.
- As children outgrow the need for childcare, nannies move to new families. This can create gaps in employment and wages. Having emergency savings in place will create a smoother transition between families.
- Retirement savings is the nanny’s responsibility. Many nannies are unsure about what type of retirement savings plan is best for them and instead avoid saving for retirement or save in the wrong type of account.
- Nannies receive gross wages, with no deductions taken out for taxes. If a nanny doesn’t budget correctly throughout the year, a surprise tax bill can be a shock come April 15.