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Some people hit the gym in January. We’re all about reviewing our finances for a fresh start. Our experts weigh in on smart planning.

There’s no sugarcoating the financial challenges American women face as a massive, half-the-nation sized group. We’ve always made less than men, collectively and we are more likely to work part-time. Overall, Maine women earn 82 cents on the dollar of what men make, according to a study by the National Partnership for Women & Families. (Black women earn 65 cents to a white man’s dollar in the state.) In a year, that 18-cent difference averages to $8,858.

That seems infuriating in the here and now, but try looking forward to your retirement after years of this kind of pay disparity and then let your rage boil over. A woman in Maine whose career spans 40 years will earn a lifetime average of $354,320 less than a man with the same long career. Don’t even get us started on what her employer’s 401K match might have been on those dollars. State legislators are working to narrow the gap, and legislation sponsored by Sen. Cathy Breen, D-Falmouth, in 2019 that would prohibit prospective employers from asking about wage or salary history, was signed into law by Gov. Janet Mills in April. But there’s a long way to go, with some estimates indicating the gender gap for pay won’t be eliminated until 2060.

Women live longer than men (on average six to eight years longer, according to the World Health Organization) which means more retirement years to plan for, with fewer dollars to start out with. H.M. Payson’s Michelle Santiago, managing director and chief trust administrative officer for the 165-year-old firm, has given a lot of thought to this essential dilemma for women—she and another colleague produce a newsletter tailored to women’s investment needs—and the bottom line is, we have to save sensibly, invest more and plan better.

Chances are, you probably already knew that. But this MWM financial guide, informed by local financial experts like Santiago and broken down by what you should be doing to save in each decade of your career, is designed to prepare you for not just a better 2020, but a better future. And it’s never too early to start.

TEEN YEARS

Your teen years are an ideal time to start thinking about money in a smart way, although the fight is uphill against the many temptations and distractions. “We’re in such an instant environment,” says Andrea Williamson, a financial advisor at Edward Jones who specializes in working with women. “Long-term anything is a new behavior.” She encourages parents to get their children used to the gratification of saving, and investing.

But if you’re parenting a teen and want to talk money, experts say, tread carefully. “It’s really hard to talk about money with a teenager in a way that gives them an appropriate amount of information and doesn’t stress them out,” says Portland-based financial journalist Michaela Cavallaro. Keep your own financial talk to a minimum and focus on building their good habits. Her daughter Skylar, now 13, starting at age 3, when she had an allowance of 75 cents a week and would divide the three quarters she got into three jars: one for savings, one for spending and one for charity (she gives regularly to the Barbara Bush Children’s Hospital). “What I focus on with her is less about our overall financial situation and more about her spending decisions,” Cavallaro says.

They use an app, RoosterMoney Allowance Manager, to keep track of her non-chores based weekly allowance. The money in it is virtual, meaning both of them are using it to know how much is in her “savings bank” and so forth. (Then Cavallaro writes checks or uses her debit card when her daughter is ready to make a purchase.) Letting her make mistakes is key, Cavallaro says. Like the time her daughter spent $25 on a plaid matching bandana for their dog and a scrunchie for herself that maybe got worn once. It emptied her spending allotment. “I asked her, do you regret spending the money?” Cavallaro remembers. “She’s like, ‘Kinda but whatever.’ And she wanted something else for her room and didn’t have the money so she went out and found a babysitting job.” That counts as a success, Cavallaro says.

TWENTIES

Many twentysomethings are facing steep student loan debt, so paying that off is obviously going to be the focus. “Do not default,” Williamson cautions. “It will follow you.” If you’re lucky enough not to have student loan debt, that doesn’t mean your 20s should be a time of wild spending, even if you are tempted to splurge on items for that first apartment. Try your hardest to stay out of credit card debt, even if that student loan payment hurts and those boots look incredible on you. “The more you can be prudent about spending only the money you have, the more it sets you up to be financially stable,” Cavallaro says.

Williamson calls credit card debt, “bad debt.” Think of credit cards as a partner in every purchase transaction—a partner that’s charging you 24 cents on the dollar every time you charge something. The best practice? Pay it off monthly.

Everyone we talked to agreed, start seriously thinking about money by this decade. “The earlier you start, the more flexibility you have,” says Santiago. She likes to give her younger clients the Latte Savings model. If you invest $4 a day—roughly the cost of a latte—starting at age 20 and doing so until 65, you’ll have put $64,080 into an investment fund. Assume a 6% return over those years? That would be $288,000 worth of coffee. Or—and this is a lot better than coffee—some freedom to live.

By the time you’ve got that first job, savings should be a nonnegotiable budget expense. “The greatest risk to finance planning is spending,” Santiago says. “But it’s something we can control.” She breaks it down into a 50/20/30 rule. Fifty percent of your income on housing and food, 20 percent on financial priorities like paying off debt, emergency money and retirement. Save 30 percent for lifestyle, including social spending, clothing, memberships and other non-essentials.

Even if the future for the planet seems gloomy—we get that, climate change is real and it is scary—it doesn’t mean you stop planning for your own future. Cavallaro suggests putting even just $500 a year in an Roth IRA (withdrawals will be tax free at retirement!) or if you work for a company that offers a 401K match, at least contribute enough to get the match. Free money, they call that match, and it adds up. “It is so powerful because of the effect of compounding interest,” Cavallaro says. Williamson agrees that twentysomethings don’t need large sums of money to invest, because they have time on their side. “It’s a question of where they want to be at 55, 65, 70,” she says. “They get a chance to dream it and build it.” Be consistent and you’ll end up with a habit of savings.

Another key item Cavallaro recommends for twentysomethings is to start building a cash reserve, equal to three to four months of expenses. This can be brutally hard when income is low, but trust it’s easier to do in the kid and mortgage free years. If you can even put $100 a month aside, “you’ll never regret it,” Cavallaro says. Got more than four figures in the savings account? Move it to a money market account. “The point of this money is not to produce a return,” she says. It is to be safe and accessible and liquid, in case you break your leg and can’t work for a few weeks. “I would be rolling my eyes at this if I were still in my 20s,” Cavallaro acknowledges. But the more you plan, the happier you’ll be long-term.

THIRTIES

This is when it gets real. Maybe you have small children. Maybe you are buying a house. The overall financial picture for all can be daunting. Fewer employers have pension funds. Health care coverage is worse and the costs of care is rising. Will there be Social Security in 35 years? These are part of the reasons why if you haven’t gotten serious about your finances yet, you need to make a move now. And if you’re just starting? H.M. Payson’s Santiago, who has a background as a trust and estate attorney, says you need to play catch-up. Act like you’re 20, not in the spending department but the savings department.

Next on the getting-real list? Life insurance. Sure you just ran Beach2Beacon and feel fantastic but, this is the time to lock in a good rate on insurance. As one of our experts said, you pay in and hope you and your dependents never need it. Thinking about buying a 10-year term policy? Double that. Cavallaro signed up for a 20-year term when she was 35 and pays about $300 a year (hint, that’s nothing). “It is an expense that you hope just goes out the window and you never see it again.” Our experts agree on this. Both term life and disability insurance are smart risk management tools Santiago says, ones which recognize your own worth. “One of the greatest assets for people still early in their career is their earning capacity,” she says.

If you are considering buying a car or a house, save for them in the smartest ways. If you need the money in three years or less, Santiago recommends short-term, conservative bonds. Intermediate term bonds work for a three to seven year investment window. Anything over seven years, like your retirement fund, should be in the stock market for optimum growth, she says. Ideally, you leave it there, saving for a home in a separate account.

What if that savings account never, ever gets a boost? Cavallaro dislikes the term side hustle, but whatever you want to call it—part-time, freelance—at this point in your life, when you’ve got energy, is perhaps the best time to take one on. In her early 30s, she got a regular freelance job that took about a day a week. She banked everything she made from it. “That money never touched our regular budget,” she said. “And that was the down payment for the house.”

You will also want to think about building that emergency cash fund. “As you take on more financial obligations, you want to make sure your emergency fund expands to reflect that reality,” Cavallaro says. And this one might seem crazy, but it’s not. Make a will. You can always adjust it later. “You don’t need to have tons of money to have a will,” Cavallaro says. “It really simplifies things for survivors.”

FORTIES & FIFTIES

The forties and fifties are eventful. There are a lot of expenses on the table at this point. Credit cards, mortgage, tuition. Maybe caring for elderly parents. In our fifties we get hard lessons in mortality when family and friends die. And retirement is fast approaching. “People come to me with their hair on fire, saying, ‘I’m behind!’” says Williamson at Edward Jones. If they’ve been saving in their retirement plans, they’re likely fine. But it might not feel that way. “It’s a cash flow issue in the forties and fifties,” she says. What Williamson tells her clients is that she’s sitting at the table as “the 70-year-old you.” In other words, never skimp on retirement, even when cash is tight.

Especially if an elite college has accepted your child but without financial aid. Parents love their kids, Williamson says, but college debt is not about love. “You can finance an education,” she says. “You can’t finance a retirement.” Many say this is a good time to stop putting money in your child’s 529 college savings plan. Kids have a lifetime to pay back their loans and as with the oxygen mask instructions on the plane, parents should always secure themselves first.

Get to know your employer’s retirement program. Your employer might encourage you to save by offering you a rate that’s spread out differently, say 50 cents to the dollar. Maybe the total match you’re getting is only 3 percent, but you have to put in 6 percent to get it. Worth it, experts say. You should be “doubling down” on retirement now, Cavallaro says. How’s your match? Nationally, the average employer match is around 4 percent. (Fidelity put the average at 4.7 percent in 2019.) If you aren’t getting that, or close to it, consider a job change. And diversify your retirement savings. Remember that your 401K will be taxed when you begin to withdraw from it. But the money you feed into a Roth IRA will not. Buying an annuity is also an option, but usually, you’re giving up flexibility.

This is also the time to make sure you know what your parents’ plans are. “Or at least lay the groundwork for these conversations, which are hard but much easier to have when it is all in the abstract,” Cavallaro says. Ask them where they keep their papers, accounts and who their lawyer is. On the plus side, asking about their situation is likely to motivate you to think about your own retirement.

SIXTIES & BEYOND

At 60, most people are looking at fewer than 10 years to go before retirement. Now it is time to assess what you’ll get and when, between Social Security, pensions, annuities, 401Ks and IRAs. “Figure out literally which money gets withdrawn from which accounts at which time,” Cavallaro says. It can be complicated, so “If you haven’t called in a professional earlier in your life, do it now.”

If it’s bleak, do whatever you can to get more money into that fund. “The dream is never dead,” Williamson says. “At this point it requires concentration, consistency and effort. You can’t miss a month. We’re looking under every rock to determine a realistic retirement plan.” There’s a certain amount of anxiety involved. Santiago hears from clients who want to know exactly how much they need to retire. Her answer is simple: it all depends on how much you spend. “There’s no magic number,” she says. “It’s a factor of spending.”

Women typically receive less Social Security but need it more because we tend to live longer. Williamson considers herself a longevity advisor; she wants to keep every woman out of the nursing home if they desire. “You don’t work your whole life to end up in a nursing home,” she says passionately. Williamson has seen many older women take care of ailing husbands by dipping into their investment portfolio. “Then when it’s the wife’s turn, the portfolio is gutted and she ends up in a nursing home.”

Or she’s living independently but facing lifestyle changes she might never expected. “There are a lot of things spouses do that you might not notice until you’re a widow,” Williamson explains. Shoveling snow, changing light bulbs and other home maintenance that women may need to hire help for. “It’s the little things we don’t think about that add up and bite into the budget.”

Williamson is a strong believer in “dignity of life” at the end, and she talks frankly with clients about long term care, which can be incredibly expensive. She encourages clients to offset at least some of the projected cost with an insurance product to avoid depleting investments. “If you can’t write a check for it, you need to insure it,” she says.

And never stop thinking about the long term, she says. “We have to plan for reaching 100,” Williamson says.

*With reporting from Maine Women Magazine editor Mary Pols.

Sarah Holman is a writer living in Portland. She is enthusiastic about cheese plates, thrift shop treasures and old houses in need of saving. Find her online at storiesandsidebars.com.