3 tips for young women: How to maximize your early career years
by Manisha Thakor

Wondering how to make the most of your early career years? Here are three pearls of financial wisdom to go along with your best power suit.

Ask for it

When you're young, career choices and future income stream are your most valuable assets, bar none. Negotiating the best pay package early in your career will generate great returns for years.


Subsequent growth and raises will be calculated off that initial base. According to noted researchers Linda Babcock and Sara Laschever, an individual stands to lose more than $500,000 in cumulative wages by age 60 if they don't negotiate.
Men still negotiate 4 times more often than women, but the women who do win too: they earn $1 million more over a working lifetime than women who don't. There's a current wage freeze? Ask for career development opportunities or plum work assignments, which can lead to key promotions and future raises.

Pay it down

Looking for a “sure thing" to improve your financial picture? Pay down your debt.
Whether you're carrying debt on credit cards or high interest student loans, every single dollar you pay off earns a guaranteed return. No stock in the world can offer that. What's more, paying down debt tends to reduce your stress levels—which can increase productivity at work (and generate attendant raises).
My favorite rule of thumb: if you owe less than $5,000, each month add $50 to your minimum payment; if owe more than $5,000, add $100. Target your highest interest debt and watch those balances melt away.

Start saving now

You never know if you might want to take time out of the workforce to raise your children (or provide elder care). To give yourself this option—without derailing your ability to retire—you can participate in your employer's retirement plan.
Consider contributing at least up to the point of your employer’s match (and as much beyond that as you possibly can). Here’s why. Aimee saves $5,000 a year from age 25 to age 35. Then she takes 10 years out of the workforce to raise her kids. She returns to work at age 45 and continues saving $5,000 a year until retirement at age 70.
By contrast, Belinda waits until age 45 to start saving for retirement. But then she saves twice as much as Aimee, $10,000 a year until age 70. Both women earn 7% on their investments. Who has the bigger retirement nest egg?
Surprise – it’s Aimee with $1 million (versus Belinda at $632,000). So saving now can help protect your ability to retire as life takes its delicious twists and turns. Even at small amounts, starting early makes all the difference.
Invest in your early career by committing to act on these three pieces of financial wisdom.
Manisha Thakor
Manisha Thakor (Harvard MBA, CFA) is founder and CEO of MoneyZen Wealth Management, which provides financial planning and investment management for women and families. She is a frequent commenter on issues of financial literacy and co-author of two books on personal finance.

Teachers Insurance and Annuity Association of America (TIAA) has sponsored this post for information purposes only. Manisha Thakor is unaffiliated with TIAA, College Retirement Equities Fund, and their affiliates and subsidiaries (collectively TIAA-CREF), and TIAA makes no representations regarding the accuracy or completeness of any information on this post or otherwise made available by her. Ms. Thakor’s statements are solely her own and are not endorsed or recommended by TIAA. TIAA does not assume responsibility or liability for the content or privacy policies of external sites.  Any opinions expressed thereon do not necessarily reflect the views of TIAA.

The information is provided for informational purposes only and is intended to engage you in thinking about your financial planning needs. Of course, each person's results will vary based on various factors, including, but not limited to, the products or strategy selected. There is no guarantee that results similar to those portrayed will be achieved. Certain products and services may not be available to entities or persons.

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