She's there in your mind's eye: The Perfect Nanny. Standing confidently in your kitchen, halo shining, she calmly assembles dinner while reciting Wordsworth to your attentive, obedient children. But where on earth do you find her?

As anyone on the "Nanny Quest" knows, finding a modern-day Mary Poppins with a master's degree and a driver's license is another matter altogether. We've all heard the horror stories. Selecting a total stranger to care for your beloved child can be hair-raising. It's one of the most important parenting decisions you can make, so it's worth taking the time to study your options and make a careful choice. Following these five hiring principles can go a long way toward helping you find a real gem. She's out there somewhere...

1. Assess Your Expectations

A crucial first step in the process of hiring a nanny is evaluating your expectations. Take a full inventory of all of those soft-focus nanny-related fantasies you are harboring. Then bring your budget and your expectations into alignment.

Three hundred dollars a week is pretty much the lowest rate you'll find for a nanny. The most elite nannies--skilled professionals with graduate training in child development--charge $1,000 per week or more. So, consider what is most important to you.

For example, English proficiency was high on my cousin Mike's list of must-haves. He and his wife were anxious about taking on the managerial role of employers. They imagined that having a nanny who was fluent in English would reduce the awkwardness. But a friend gave Mike the name of a woman whose English was limited, but who had earned an education degree in her native country. Her references were so extraordinary that Mike and his wife scheduled an interview, and she blew them away. Two years later, this amazing nanny has taught them more about parenting than they ever imagined.

2. Consider the Source

Next, decide on your recruitment strategy. Many local employment agencies specialize in nannies. A good agency will ask whether you want someone to live in your home or not, whether you want someone who can teach your children or someone who is there mostly just to baby-sit, and many other questions. They will then match you with appropriate candidates who have passed a background check.

Obviously, the advantage of using an agency is that a lot of the legwork is done for you in advance. The catch, of course, is that you'll need to pay a one-time placement fee. Fees can be steep--often in the neighborhood of 8-10% of the annual salary you'll pay your nanny.

Alternatively, you can search for a nanny through word-of-mouth or through classified advertisements in the paper. There are also websites with listings of nannies, and some even post resumes online.

Be patient and cast a wide net; you never know where the right candidate will be. My neighbor Stacey found a great nanny while chatting with her disabled father's part-time nurse. The nurse, who also had experience with children, was looking for additional work to fill out her schedule. Coincidentally, Stacey had wanted help with her kids two days a week. She was delighted and relieved to have discovered just the right candidate in someone she already knew and trusted.

3. Do Your Homework

Once you have identified a possible candidate or candidates, prepare carefully. To help you through the process, consider investing in a hiring guide. Several excellent self-help books are available that provide crucial information, such as legal and tax help, sample interview questions, and employment contracts to use when hiring. Especially if you are searching for a nanny without the help of an agency, a written guide can be invaluable.

When preparing to interview a candidate, consider ahead of time what you want to learn during the interview. Examples of topic areas you need to address include basic information, such as her work history, when she's available, and whether she drives; what tasks she can do (such as housework, cooking, etc.); what her approach is to parenting issues such as discipline; and what she wants and needs out of the job.

Also, think about what non-tangible things you want to assess. What questions does the candidate ask you? That can tell you what's most important to her. How does she talk about the children she has cared for previously? A great nanny is a loving nanny, and you should be able to hear the warmth and affection in her voice. (Ours brought photos of her last little boy to show us during her interview!)

4. Check Those References

And make sure you check all of them, whether you're working with an agency or not.

"Parents sometimes make the mistake of not making all the calls," says Casey Morrison, director of the American Child Care employment agency in Los Angeles. "But checking references is the single most important thing they can do."

If possible, try to get a reference from a prior family whose children were the same age as yours are. The skills needed to be a great nanny for a newborn are not necessarily the same as those needed to manage older toddlers.

You'd be amazed at what you can learn from previous employers. For example, my friend Karen recently got a call from a prospective employer who was considering hiring Karen's former nanny. This nanny had quit with one day's notice. She left Karen, a busy self-employed professional, high and dry with two small boys, one of whom was ill."I couldn't believe this woman gave out my name as a reference," she fumed.

5. Trust Your Instincts

If you've done all your homework, conducted a careful interview, and checked references thoroughly, your choice will probably be clear. But if you're still on the fence about a candidate, figure out whether your instincts are telling you something.

Some anxieties are normal. For example, if you are a first-time parent, perhaps you're worried that an experienced nanny will know more about parenting than you do. That may be the case, but it certainly doesn't mean your child will think of his nanny as more of a parent than you are. And her expertise may end up helping you a lot.

On the other hand, if your instincts are making you feel mistrustful, consider continuing your search. You really do need to feel absolutely confident about your choice.

Picking the right nanny for your family can be a major project, to be sure. And no matter how saintly the nanny you hire, you may still be nervous the very first day she arrives for work. But if you've taken the time to select carefully, it will be that much easier to take a deep breath, place your little one in her arms, and leave the two of them to get acquainted.