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Your Evolving Finances at Each Stage of Career Development

career development

Having retired from a career in medicine, I haven’t put much thought into career development, but if I’m being honest with myself, I’d say I’m in the Transition Phase from a rigorous and demanding career to one with a lot more flexibility.

Dr. Sanjana Vig is juggling two careers, one of which is the demanding one I retired from, and the other is similar to the one to which I’ve been transitioning. She is the author of today’s guest post on career development.

Author Bio: Sanjana is a physician anesthesiologist, avid traveler, and entrepreneur. She founded The Female Professional in order to give women a voice, a community, and provide resources to help them overcome hurdles and achieve success.

With her experiences as a physician, as a CEO of a startup, and as a writer, she understands the struggles and frustrations that women face. She also understands what it takes to move past those things and come out on top. Through this platform, Sanjana aims to empower women to be their best, authentic, selves, achieve work/life balance, and live life to the fullest.



If you’re thinking to pivot or make a career change, it’s important to first recognize which stage of your career development you’re already in. Your career stage can affect your transition, your trajectory at your new job, and can impact your finances.


What Is Career Development


Career development is the process of choosing a career, working on your skillset, and advancing along your career path. In other words, you can think of it as developing a growth mindset around your career, where you embark on a journey of learning and self-reflection that allows you to advance towards the career and lifestyle that you really want.


Why It’s Important

If you want to progress in your career, then taking note of career development concepts is important. They are the building blocks of understanding yourself, your strengths and weaknesses, and your goals for the future. Plus, it can help you see yourself in the context of your job and allow you to assess (and reassess) your decision to stay or look for new work.


Stages of Career Development


There are the classical stages and the modern stages that came later. To keep it simple, I’ve highlighted them in the table below:

Classic Stages Modern Stages
#1 – Exploration – your early to mid 20s, from college to preparing for work; you’re trying to figure out what to do, and so try a lot of new things. #1 – Assessment – You’re looking to define who you are and your interests. You’re trying to figure out your place in the career world.
#2 – Establishment – You’ve found your first job, may stay here for 3-5 years, and where you’re likely to make the most mistakes and incorrect assumptions. This time is marked by imposter syndrome as you look for your own niche and ways to differentiate yourself. #2 – Investigation – You do your due diligence into your career options. You network and try to figure out what is right for you.

#3 – Preparation – You’re preparing for the workforce and ensuring that you are ready for the field/job/niche that you’ve chosen for yourself.

#4 – Commitment – You apply, accept, and start a new job.

#3 – Mid-career – You’re either moving up at work (“climbers”) and learning new things or you plateau in skill and ambition. #5 – Retention – You are comfortable in your career and are familiar with your industry. As such, you commit to staying and developing your skills/moving up, or you stay in your comfort zone and plateau your skillset.
#4 – Late Career – You are done learning; you’re in the role of “senior” at work and just work to maintain your status. There is no sense of a need to compete or outperform anyone. #6 – Transition – You’ve decided that you need to make a change, whether at the end of your career or in the middle. This stage is marked by anxiety and confusion as you are unclear about how you want to proceed and where to go.
#5 – Decline – You’ve decided to retire and are preparing for that reality after years of dedicated work.

As you can see the modern interpretation of career development spreads the growth and assessment out over more steps. Regardless, there is much overlap with both.



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Factors That Influence Career Development


How or when you progress in your career can depend on a lot of factors. To name a few:

An individual’s personality, drive, and ambition – Your willingness to work hard and go the extra mile to learn your craft and make a good impression can really affect how much you grow both personally and professionally.


Level of education – The higher your education level, the more likely you are to choose to participate in career development opportunities that allow you to grow.


Company situation and support – Do you work for a company that has resources to support you in your growth? Do your colleagues and superiors encourage you to try new things, or challenge you? This can make all the difference in how far you want to go and can go.


Personal finances – Often, the ability to go forward is dependent on our financial situations. Some risks lead to reduced pay, or temporary pay holds; educational events or courses require fees; learning new skills may require a time commitment that takes away from your ability to earn. If you are not able to bridge that financial gap, then taking those risks no longer is an option.


Personal life – Family obligations or responsibilities can affect career development planning as well; these obligations can tie up your time, your finances, and your mental bandwidth, therefore preventing you from pursuing opportunities that may arise.


How Career Development Affects You Financially


Turning the tables a little bit and talk about how pursuing this career growth can affect you and your life financially.

Of course, you hope that all the effort you make and things you do help you to grow professionally and personally, and they likely will. No experience out there leaves you without a few lessons learned. However, how do the different steps of career development affect you financially?


1 – Exploration (Assessment)

When you’re starting out, just graduating from school, or exploring different options you are likely not making much money. On the flip side, at this stage, you are likely accumulating debt either with more school or through starting a new business. Your investments and savings may be minimal as well.

At this stage in life, depending on your upbringing, your working knowledge of finances may have some gaps, and in fact, you may not even be thinking about your financial future.


How To Address The Issues in the Exploration Phase

At this stage, education is the most important thing. Learn as much as you can about finances, retirement, investing, and saving. Your ability to participate in these areas at this time is minimal, but knowing what you need to do can help you get started sooner rather than later when you ARE able.


2 – Establishment (Investigation/Preparation/Commitment)

Once you’ve decided your career path, and committed to a job, you will start earning a paycheck. Your debt payments will start to come due, and you’ll realize there is a huge difference between what your listed salary is, and what you actually end up taking home.

Depending on where you work and the services offered, you may have opportunities to invest in retirement accounts, and/or opt into an employee option pool of company shares. At this stage, I’ve also seen many start to fall into the trap of lifestyle inflation.


How To Address Establishment Issues

Again, education is important but also paying attention to your paycheck. Understand not just how you’re getting paid, but where your money is going afterward. Ask questions at work and speak with a financial officer to understand your options (if available to you).

To avoid the lifestyle inflation pitfall, focus on paying off debts first and building a strong financial foundation. This includes working towards a solid emergency fund, opting into retirement (even if the amounts are small), and starting to invest (again, small amounts are ok, what’s important is that you get started).

The foundation you start to build when you’re still young will pay off in big ways in the future. But it’s critical that you get started, period.


3 – Mid Career (Retention)

I think what happens in this stage is very much dependent on your personality, the goals you have set for yourself, and your family and social obligations.

There are two decisions to make during this stage: are you going to cruise along where you are or are you going to make some moves towards growth and change?

If you cruise, you may be losing out financially, as no growth means no promotion and no pay raise. On the other hand, shifting gears and making changes, while potentially financially beneficial in the long term, can have short-term consequences of either reduced pay or increased work with compensation unchanged.

What does that mean? It means that you may have to make some sacrifices if you decide to climb the career ladder. These could be financial or personal. Career growth may require that you go back to school or re-enter training (added costs), or it could involve more responsibilities at work and less time with family.


How To Address Mid Career Issues

I think the decision you make in this stage needs to be carefully thought out. Weigh the financial risks with the potential gains. This goes in the context of the life you lead and what is actually practical and possible for you.

For instance, going back to school often means reduced work hours (decrease pay) or increased life stress. If there is no guarantee in promotion, pay raise, or advancement at the other end, then it may be prudent to rethink the decision. However, if you know your growth potential will increase, then it may be a step worth taking.

It’s also important to realize that career growth can often occur if you leave your job and make a parallel shift. For instance, as a physician if you want to shift gears, then leaving clinical medicine and entering the industry (consulting, pharmaceuticals, startups) is a viable option to pursue. The risk is that the pay will change, and you may not have the same guarantees that you’re used to, but the opportunity to move up and flourish is much much greater.

Something to keep in mind: the ability to make change is often linked to the financial situation we are in when making the decision. If you have a sound financial foundation, and low or no debt, then change is easier. If nothing else, during this stage, focus on reducing your debt as much as possible.


4 – Late Career (Transition)

At this point, you’re planning for or thinking about retirement. Your ability to do that is directly linked to how much you have saved and invested.

The less you have saved, and/or the more debt you still have, the longer you will have to work to pay for your retirement years.


How to Address Late Career Issues

If you haven’t done so, pay off debts and downgrade your lifestyle. The less you’re spending now, means the more you’re saving and investing.

Something else to think about is where you will live. For those in a high cost of living area, moving to a low cost of living area can make a huge difference in retirement costs. States without income tax can also offer a reprieve.


5 – Decline

Once you’ve decided to retire, you are dependent on your retirement income to cover your expenses. Depending on how much you’ve invested and your lifestyle requirements, the amount you withdraw each month will vary.

For many, this is a time to pursue interests, relax, and recharge after years of hard work. This is also a time where your health may decline, or health problems catch up to you.

Health issues equal added expenses.


How To Address The Issues Associated with Decline

As mentioned earlier, if you don’t have much saved, then reduce your expenses as much as possible. Take care of your health (hopefully you’ve been doing this all along), and keep yourself busy.

Some hobbies or new endeavors may lead to an opportunity to get paid and provide you with some additional retirement income. This is not something that’s necessary but can be a happy side effect of pursuing your interests.


Bringing It All Together


Each stage of your career has different financial implications. Some key take-home points to remember:

  • Start early with investing, saving, and paying off debt
  • Learn as much as you can about finances & understand your paycheck at each stage
  • Don’t be afraid of change, but be sure that the changes you are making really work for you, your life, and your goals
  • Adjust your lifestyle to match your means
  • Be open to moving to reduce expenses
  • At all times, take care of your health (mental and physical), so that in retirement you can really enjoy your time


Final Thoughts


Everyone’s financial situation is different, and each career path is unique. At each stage in your career you will be given all kinds of advice – to pivot, to go back to school, to work more, join committees, to take steps for promotion, etc – but take all of it in the context of who you are and what you actually want to do.

Not everyone belongs on the same path and not all “financially sound” decisions benefit everyone.



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5 thoughts on “Your Evolving Finances at Each Stage of Career Development”

  1. Pingback: 31 Things to Do With a Windfall - The Female Professional
  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. Career development is the process of choosing a career, working on your skillset, and advancing along your career path. In other words, you can think of it as developing a growth mindset around your career, where you embark on a journey of learning and self-reflection that allows you to advance towards the career and lifestyle that you really want.

  4. Pingback: Career Development |
  5. Interesting article. One thing – i am retired. I live in an expensive state. But my priority as to where to move to (wife wants to move) has less to do with cost and more to do with climate change and access to quality health care. Perhaps illogical, it is reality.

    • I think that’s entirely logical.

      And in retirement, your taxable income is most likely lower than it was in your working years, especially if you had a high income before and diversified your investments among tax-deferred, Roth, and taxable accounts.

      The taxation of where you live matters much more in your working years.



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