How to say it without being rude? ?

Wow! I have been there and done that. Its not easy to take care of some one else kids that are misbehaving. What I did was tell the mother that I was going to look else where for work as in outside the home. Give her time to find someone else or maybe help her find another neighbor. OR.....you can be honest with her about the behavior of her children and explain that your home has rules and boundaries. Try working with her..... but if you are really NOT liking this at all, just tell her you are going to stop the sitting because of the friction it brings into the house. I know you need the money (I did too) but I didn't need the money bad enough to be in turmoil all the time. Sometimes honesty is the best policy. ( she could be one of those neighbors that depends on neighbors too much)