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The first step to creating a babysitting exchange network is to get to know a large number of parents with children in the same age range of your children. The reason for this is that with the large variety of parenting styles out there, you will want to find parents whose style most resembles your own.
Other parents want the same thing you do. They want to be able to leave their children with reliable sitters that don't cost an arm and a leg. It's a plus if their kids have built-in playmates, too. So, most parents are ready to jump at an exchange that means they have bartered babysitting for babysitting.
The next step is to create a list of expectations from the parent pool so that everyone knows what they are expected to do as babysitters. This will also establish guidelines for the non-sitting parents. It's no fun to babysit for people who like to just dump their kids for an indeterminate amount of time. Everyone has to play by the rules, or they don't get to play.
You need to decide if it will always be a one to one exchange or will each set of parents take a week to be the sitter for all of the children in the group. The good news about this is that if there are four families, you get three times out for every one that you're the sitter. The bad news is that you have a house full of children every time you have to sit.
Finally, you need to set up a schedule of who sits when. You will also have to make of list of any medications, dietary restrictions, allergies, etc. that is needed for the sitters to know. A phone list is mandatory also. If any of the parents do not have mobile phone service, then they should be expected to check in every 1 to 2 hours. A folder of signed releases to allow for emergency medical care needs to be established.
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