Leslie Moreno-Roacho didn’t go to college. She wanted to study nursing, but her family’s finances meant that goal stayed out of reach.
Her 1-year-old son, Zaiden, could have a better chance of making it into higher education.
Zaiden is one of the first 15 children selected for Baby Bonds, a new initiative aimed at giving New Mexico children a shot to build wealth and a head start on home ownership, entrepreneurship, paying for college or saving for retirement.
The Partnership for Community Action, Abriendo Puertas/Opening Doors, MoneyByrd and Prosperity Works announced the pilot program Thursday at the Social Enterprise Center in the South Valley.
And state officials plan to ask lawmakers to expand the program at next year’s Legislative Session.
How it works
Each of the chosen children will start with a $6,000 trust fund, which will be set aside and gather interest. As the account holders turn 18, they will have indirect access to most of the accumulated money to help improve their finances, such as paying college costs or making down payments on homes.
One-third of the value of each account will remain there, as the beginnings of a retirement savings, plus any other portion that isn’t withdrawn.
The pilot program was started with money from private donors. The first participating families have completed Abriendo Puertas’ curriculum.
Peter Wailes, a baby bond program administrator with MoneyByrd, said the initial $6,000 could more than triple by the time a child turns 18 or get close to $500,000 by the time the beneficiary turns 65.
Will the state follow?
State Treasurer Laura Montoya said a public baby bonds program will be proposed during the 2025 legislative session. She said supporters will ask lawmakers to commit state money to the establishment of a trust fund for every child born in New Mexico after July 1, 2025.
Montoya said New Mexico’s permanent funds could be a source of money needed for a state-funded program and she envisions a requirement that money from publicly funded Baby Bond accounts be spent in New Mexico.
The state program would have a required financial education component, Montoya said.
Javíer Martínez, New Mexico Speaker of the House, said this is the only state that has a right to early childhood education in its constitution . He said New Mexico also offers generous tax credits for working families, and baby bonds legislation is a logical extension of the state’s priorities in that regard.
“It’s not enough for us just to survive,” he said. “What about thriving? What about building assets? This economy in this state and across this country is built on the backs of working families. It is time that we get to build that wealth as well, just like the guys who own the corporations.”
Building wealth
Nichelle Gilbert, executive director of the Partnership for Community Action, said one of the program’s goals is to narrow the racial divide in building wealth. She noted that the children in the pilot program represent communities of color.
“One of the best ways to make money is to have money,” Gilbert said.
She said while many programs address incomes, Baby Bonds aims to go a step further by providing tools for future citizens to secure financial security,
Darrick Hamilton, a professor of economics and urban policy at The New School for Social Research, added that having access to capital can be the difference between a renter and a homeowner or permit someone to earn a college degree without going into debt.
As for Moreno-Roacho, she said she’s excited to see what Zaiden does with his life-changing investment. She said she hopes he can go to college and avoid the debt many students face.
“This isn’t just money,” Moreno-Roacho said of the Baby Bond. “It’s a ticket to opportunity.”
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