How would you handle this?

Yup, kangaroomama, and Judy; that's exactly what I am saying. As parents, they aren't thinking about our bill paying schedule or what works best for our plans. That comes second. And like I said, I am not complaining about it, just saying "that's the way it is".
Enforce your 2 week payment requirement, and begin filling that spot, or prepare to in the future.

You are all right, she's looking out for her best interest and thoes of her kids, which is exactly what I would do to. I was initially upset and mad but I understand why she's doing it and admittedly, I'm a very VERY emotional pregnant woman so I tend to over react a bit these days!! LOL!.

She emailed me late at night to say I'd only have the kids for 1 more week. So I got up my nerve and I told her that as per my contract I need 2 weeks notice/pay regardless of whether I have her kids or not. She told me that she could not afford to pay me and the new Nanny so I will have her kids for the full two weeks before they start with the Nanny.

So I'm over it now... I'm sad the kids are going, I'll miss them and so will my own kids, but I'm looking forward to enjoying some one on one time with my daugther before the baby comes. And now I get to have a fresh start and revise how I want to run my daycare!