Saving Money for Your Baby's Future

recession guidesavings account for baby

Soon after my daughter was born I opened up a savings account for her. I deposited money she received from her grandparents and friends and family for her Christening. The account is in her name and I'm the trustee.

My plan is to keep adding to it whenever someone gives her a gift of cash, but I'm not sure when or how I'll give her the money in the account. I tried to find out what other CafeMom members are doing—they've got some great ideas for saving money for your baby.


"This might sound silly, but it truly adds up quickly. If your paycheck is $784.79, take the $4.79 and put that in a piggy bank for your child. That leaves you with an even amount to pay the bills and buy the necessities. Then you can up the amount from there, as you get caught up and get on your feet you could take the $14.79 leaving yourself with $770 and so on. A little something is better than nothing at all. Sometimes I even got it all in change and put it in the piggy bank and then every few months I would make a deposit to the account. You can open accounts for kids at many banks for as little as $25 and there is no minimum balance requirement." — MansfieldMomma

"We save the kids' money at home until their fifth birthday. Then they get to go to the bank and open the savings account themselves. They get to see the vault where the bank 'holds' their money for them, and sign the signature card. The bank gives them a little young savers package—it's all very cute." — teri4lance

"My husband has put away $1,000 for our daughter already, but my sister has twin boys and she does the same for them. Any money they get, they get half and the other half goes to their savings. They're now nine and they each have nearly $3,000 in their accounts. They can have it when they turn 18." — SMWOODS

If you're trying to save for your baby's education, a simple savings account might not be enough. You might want to consider a 529 plan or some other kind of college fund. You can find information on that at Saving for College.

If you're strapped for cash and don't know whether you should be saving for your kid's college education or your own retirement fund, Suze Orman offered this advice to Babble:

"Now, without a shadow of a doubt, the parents’ retirement account. Forever I have been saying you cannot get a loan for retirement, that’s number one. Number two: Because of the economic situation in the United States, you’re going to see Stafford Loans, which are loans for kids going to school, whether they’re subsidized, which you need financial aid for essentially, or unsubsidized. You’re going to see interest rates be relatively low on those loans.

"Plus Loans (loans for parents to help their children) have been changed now where you do not have to pay those loans back until after the student has graduated school. So there are loans that one can get for a relatively good interest rate to see your kids through school. However, there is nothing that will help you retire unless you have money in an account to do so.

"In today’s day and age, especially with the markets being as low as they are, especially the fact that maybe you’ve already put some money in a retirement account and you’ve seen that money go down, you have got to continue to dollar-cost-average into good diversified investments as long as you have at least ten years or longer until you need this money, so that you can decrease the price of the investments that you have so that when these markets do finally recover, you can make money on it. So especially right now, given this economy, you have got to save yourself first and put money away for your own retirement before you put money away for your child’s college education."

Have you started a savings account for your baby? How are you saving money? When will you give your child access to it? Have you started a college savings plan?

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