Nannies should have contracts. Although you want to think of this person as a babysitter or even as someone that is just helping you out, it is essential that you write up a formal contract with them. This contract should outline such things as pay, time on the job and off, disciplinary actions, recourse for their actions, details about how you wish your children to be handled as well as details about what is expected of them.
If you do not have room for a live in nanny, you can still hire one. Many of today's nannies provide their services during the day while the parents handle the kids in the early morning and at night. That means that the nanny is there for the important things like homework, play time and even most of their meals. A nanny that doesn't live with you can even be more flexible in their pay schedules too.