What is “One Hundred Ninety-Five Dollars and Seventy Five Cents“?
A: The amount of an Au Pair’s weekly stipend, or
B: An awkward, not-round number?
Both. Which is why many families ’round up’ from $195.75 and pay their au pairs an even $200 per week.
Rounding Up seems to make sense.
If you pay your Au Pair with cash, it’s just easier to give her/him a hunk of $20 bills from the cash machine than it is to find nine 20’s, one 10, a 5, and then three quarters. I get that.
Or, if you pay your Au Pair with a check or electronically, you might ’round up’ because you don’t want to look stingy. I get that, too.
But when you round up for any reason, it means that each week you’re paying your au pair an additional $4.25 each week.
I know– it’s like giving your Au Pair a grande Frappucino every Friday. whoo-hoo.
Is there anything wrong with that?
Yes, actually, there *is* something wrong with rounding up.
Instead, you’re pushing your au pair to go just a little faster on the hedonic treadmill, making it likely that s/he won’t even notice, much less appreciate, that extra week of pay.
Yes, you heard me. “… That extra week of pay.”
Over the course of an au pair’s year, that $4.25 adds up to $221.
Two Hundred Twenty One
That’s a lot of dollars to go unnoticed.
Instead of rounding up that extra money into a weekly stipend to save you some energy, you could roll up the money into one lump sum of $221.
Save that money over the course of a year and give it to your au pair as completion bonus or as extra mad money when s/he goes on vacation.
Then, that $4.25 per week would feel like a reward for a job well done.
Alternatively, you could save that money up as a security deposit. It could cover any damage to your house (hair-color stains on bathroom walls?) or to pay for the deductible in the event of a car accident. At the end of the year, any remaining money could be given to your au pair as a gift.
Whether as a reward or a gift, I’d rather have $220 than a year of Frappuccinos.
Round Up or Roll Up?
Scientifically — and I speak as a management professor here — it makes more sense to roll up the extra cash into one or two bonuses than it does to round it up to an even dollar figure.
The ’rounding up’ strategy is merely convenient.
The ‘rolling up’ strategy has motivating power.
Since folks have already weighed in on this topic in an earlier comment thread, I’ve moved the comments to this new post. Fire away, below!
Update: Let us know what happens with your family: