3 Reasons to Start A Savings Account for Your Newborn

Today, I’d like to discuss somewhat of a different topic with you all. So, if you’ll allow me to deviate from the frivolity of fashion and fun, I’d like to delve into the world of personal finance…

As many of you might know, I have my MBA (with a focus in finance) and worked in finance for many years. So, numbers and spreadsheets and finance have always been strengths of mine in the professional realm. But with the impending birth of our daughter, the subject of personal finances have been heavy on my mind.

From everything I read, raising a child is expensive! Certainly, we all know about the rising cost of college education. Data shows that average college tuition these days ranges from about $10,000 for a public, in-state school to $30,000-plus for a private school. Of course, these are just tuition numbers – not including room, board, books, and other related expenses.

So, how do I apply the principles I know academically and professionally to aid my daughter in her future? The answer goes back to some fundamental principles.

1. The power of time

This one is pretty straightforward… The sooner you start saving, the better off you are. It’s just common sense, right?

However, as we can all attest, sometimes putting common sense into practice isn’t so easy. But if we can just stay focused now, our children will reap the benefits in the future.

There are two keys that will help us leverage the power of time:

  1. Discipline
  2. Consistency

How much you are able to save is almost secondary to how you save money. A little goes a long way, and a little eventually adds of up a lot. Remember, something is better than nothing.

Just think… If I save just $100 a month for the first 18 years of my daughter’s life, she will have almost $22,000 saved up for her by the time she graduates from high school. And that’s just the amount invested, not taking into account any interest that accumulates.

2. The power of compound interest

Number one leads right into number two… In fact, time is the magic ingredient that makes compound interest work best.

What is compound interest, you ask? Oh, only one of the most powerful concepts in finance! And while it may sound like a complicated concept, it really isn’t complicated at all.

Compound interest is basically earning interest on interest. So, in effect, it’s like free money! That is, as your investments earn interest, you start getting paid interest on not only your investments, but also that interest.

All of that means that your investment doesn’t just grow; it keeps growing faster and faster! Compound interest is a way to put your money to work and watch it grow!

For example, remember that example I mentioned above about saving $100 a month for $18 years? Well, the power of compound interest takes that total from $22,000 to over $32,000! Can you believe that impact? That total seems to accommodate any college education she may choose!

(This compound interest example makes certain assumptions. I’m happy to share the calculations with you, if you’d like more information.)

3. The power of example

Certainly, there are tangible benefits from saving money for your newborn. You will obviously be better prepared to handle the expenses of raising a child, any unexpected circumstances, the costs of college, and more.

But besides the tangible results of saving money for your newborn, there is a very important intangible benefit: the power of example. It’s no secret that children mirror what they see. Indeed, they learn all sorts of behaviors by what they see us practicing.

Finance habits are no exception. If our children see us being responsible with money, they will learn to do the same. This savings exercise from birth onward can, in fact, be a powerful teaching tool.

Frost Bank Makes Opening An Account Easy

So, now is the time to take action to harness (1) the power of time, (2) the power of compound interest, and (3) the power of example. And recently I did just that! That’s right: the trick is to do something now.

I opened an account for my daughter at Frost Bank. Why Frost Bank? Two reasons.

  1. Frost Bank makes it extremely easy with their stellar digital platform. Both the website and app are fabulous. If you’re like me and prefer to do things online these days, good news! With Frost, you can open an account online on their website or via the app. Indeed, it was so simple to open an account from the convenience of home!
  2. Frost Bank has competent, friendly service. As a Texas bank, their southern hospitality shines through in how they help customers. Frost Bank understands that this is more than a business transaction — it’s a relationship. And they are there to help you in any way possible – online, on the phone, or in person.

Now, after opening that account, I feel really prepared for our daughter’s birth. Well, I should clarify… I still may not have a crib set up or a car seat loaded, but I do have a good financial base prepared for her!

You can learn more about Frost Bank here.

In Closing

Given that this topic has been on my mind so much lately, I’m really interested to hear from you… Do you have any tips for teaching sound financial principles to your children? What has worked well for you?

Finally, if you have any questions about anything I shared (particularly the idea of compound interest), I’m happy to help in any way I can. Feel free to ask in the comments or via email ([email protected]). Thank you for reading along.

Thank you to Frost Bank for sponsoring this article. And thank you to the community here for supporting our sponsors. Sponsorships like this help make Wear + Where + Well possible. All opinions remain my own. 

Thanks to Mirador Builders for allowing us to shoot on location at their latest impeccably built home, available at 2117 Maconda in Houston; home beautifully staged by High Fashion Home.

Photos by Maritere Rice


  1. Sheri says:

    Hi Carrie,
    I work in finance too (I’m in HR), but have had these principles drilled into me from a young age. Yes, start saving early and consistently. Both of my children have well established RESP accounts (Registered Education Savings Plans).

    Good reminder article of this important topic. Lovely backdrop / home you shot this in.


    1. Carrie says:

      Yes, so wise, Sheri! It makes all the difference to get that early start.

      Thanks for chiming in. Xo

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