New Mexico is considering a bold policy that would give all children in the state a financial footing for the future. House Bill 7, the Children’s Future Act and Fund, aims to create baby bonds—trust funds for every child born in New Mexico after January 1, 2025.
According to Source New Mexico, this initiative could significantly impact families across the state by providing a financial cushion for children as they transition into adulthood.
What are baby bonds, and how do they work?
Traditionally, trust funds have been associated with wealth, but baby bonds flip that narrative. Under HB7, each child born in New Mexico would receive a state-funded trust fund at birth. By the time they turn 18 and graduate from high school (or earn an equivalent diploma), they could access the funds for higher education, homeownership, business ventures, or investments.
The proposed investment for each child is around $6,000 at birth, with projections estimating that, by adulthood, the fund could grow to approximately $20,000, depending on investment performance.
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What families need to know about eligibility
While this initiative offers a promising financial foundation, there are several requirements and restrictions for beneficiaries:
- Residency Requirement: The child must maintain residency in New Mexico until they turn 18.
- Educational Milestone: To access the funds, they must graduate from high school or earn an equivalent diploma.
- Approved Uses Only: The money can only be used for specific purposes, including:
- Higher education (tuition, books, or related expenses)
- Purchasing a home
- Starting or investing in a business
- Other approved investment opportunities
- Financial Literacy Program: Beneficiaries must complete a financial literacy course before gaining access to the funds to ensure responsible money management.
Why this could be life-changing for families
For middle-class and lower-income families, this kind of financial support could be transformative.
“Many families across New Mexico may be middle class, but they’re still living paycheck to paycheck. And so having an investment for their future is a big piece,” said Rep. Linda Serrato (D-Santa Fe), one of the bill’s sponsors.
Beyond immediate financial relief, baby bonds could reshape long-term economic mobility. Programs like these aim to break generational cycles of poverty by ensuring every child—regardless of background—has access to financial resources that can shape their future.
Leslie Garcia Moreno, another mom who spoke in favor of the bill, believes it could open doors for her children that she never had. “Our state has the resources to invest in the next generation and doing so will create a ripple effect,” she said. “This initiative is a direct investment in our economy, ensuring that all families regardless of background, have the opportunity to build generational wealth and thrive.”
Related: 5 ways to teach your teenager the value of finances
What’s next for the bill?
While many lawmakers support the idea, some believe HB7 still needs refinement. A few committee members expressed concerns that the bill should start as a memorial—a way to research its feasibility—before becoming full-fledged legislation.
Despite this, HB7 passed the House Appropriations and Finance Committee and is heading to the House floor for a vote. Meanwhile, a similar proposal, Senate Bill 397 (the New Mexico Next Generation Act), is also making its way through the legislative process.
Could baby bonds expand beyond New Mexico?
New Mexico isn’t the first place to propose this kind of program, and it likely won’t be the last. Several states and cities—including Connecticut, Washington, D.C., and California—have launched or explored similar initiatives. At the federal level, Senator Cory Booker has introduced legislation advocating for baby bonds nationwide, arguing that they could reduce the racial wealth gap and give every child a fairer start.
The idea is gaining traction because of its potential to address systemic financial disparities without relying on families to shoulder the burden alone. If New Mexico moves forward with HB7, it could set a precedent for other states to follow, sparking a national conversation about how to create economic security for future generations.
A shift in how we think about financial security for kids
For parents, financial planning for our children can feel overwhelming. Whether it’s setting up a college fund, budgeting for future needs, or simply making ends meet, money is a constant worry. However, initiatives like baby bonds challenge the notion that a child’s financial future should depend solely on their family’s circumstances.
New Mexico’s proposal is more than just a policy—it’s a vision for a future where financial stability isn’t a privilege but a right. It raises a compelling question for parents everywhere: What if every child had a financial foundation upon which to build their dreams?
If more states follow New Mexico’s lead, future generations could grow up with the kind of financial stability that too many families today can only dream of.
Sources:
- Booker, Pressley Reintroduce Bicameral “Baby Bonds” Legislation to Tackle Wealth Inequality. booker.senate.gov. Booker, Pressley Reintroduce Bicameral “Baby Bonds” Legislation to Tackle Wealth Inequality.
- 2025 Regular Session – HB 7. New Mexico Legislature. 2025 Regular Session – HB 7.
- Lawmakers consider proposal to create new trust fund babies. Source NM. Lawmakers consider proposal to create new trust fund babies.
