If you think the only people who need to understand finance are those who work in banking, it's time to reconsider your worldview. Whether you realize it or not, there's a good chance that you use finance every day. Studying finance, it turns out, can have a huge impact on your life — and it's probably not as challenging as you might think.
What Is Finance?
Investopedia defines finance as “a broad term that describes activities associated with banking, leverage or debt, credit, capital markets, money, and investments.”
In practical terms, finance refers to all of the money-related decisions consumers, businesses, and governments make on a daily, weekly, and yearly basis. It’s similar to accounting, but there is a key difference:
- Accounting centers on the collection and analysis of financial information.
- Finance is more concerned with the implications that arise from employing various money management strategies.
Whereas an accountant would seek to analyze financial data to produce a report, a finance expert would be more inclined to synthesize that information to generate an actionable recommendation.
In other words, finance helps us make better decisions with our money and accounting enables us to keep track of it. You use finance in innumerable everyday financial scenarios, such as:
- Making a budget for your groceries
- Deciding how much of your paycheck you want to save and how much you want to invest or spend
- Considering whether to pay your credit card balance in full each month
Americans Need Better Financial Education
There's a real need in the United States for better financial education. Numerous studies have found that most Americans are lacking when it comes to financial literacy:
- In the survey conducted for the 2023 TIAA Institute-GFLEC Personal Finance Index, American adults correctly answered less than half of 28 basic money questions.
- In the same survey, compared to those with a very high level of financial literacy, those with a very low level of financial literacy are:
- More than 4 times as likely to have difficulty making ends meet (44% vs 10%)
- Nearly 3 times as likely to be debt constrained (34% vs 12%)
- More than 4 times as likely to lack emergency savings to cover one month of living expenses (56% vs 13%)
- A survey from the National Financial Educators Council found that financial illiteracy cost Americans an average of $1,819 in 2022.
- A 2023 Bankrate survey found that 57% of U.S. adults are uncomfortable with the amount of emergency savings they currently have; 22% have no emergency savings at all.
This lack of financial understanding and ability to save among Americans is troublesome and underscores the great need for financial education.
Why Study Finance?
Given such dire circumstances, it's not surprising that many people are considering studying finance. According to the National Center for Education Statistics, in 2020–21, business — the discipline that finance falls under — was the most popular undergraduate degree conferred in the U.S. Studying finance can prepare you not only for careers in the financial services sector but also for tasks in your everyday life.
Students considering studying finance can take many different routes. An online bachelor's degree in finance, for example, can prepare you to work in corporate and government financial management, banking, and financial planning. Studying finance and becoming more financially literate enables people to make better personal financial decisions.
Pursuing graduate coursework in finance only bolsters these fundamentals. Besides improving a person's chances of being hired, an online master's in finance can also help hone your critical-thinking and problem-solving skills, which you can then use to make sound financial decisions.
Job Growth Outlook for Finance Roles
The Bureau of Labor Statistics (BLS) is the government agency that researches, analyzes, and publishes statistical data on the U.S. labor market and makes employment growth projections based on this data. The BLS predicts that overall employment in business and financial occupations will grow faster than the average for all occupations from 2022 to 2032, adding about 911,400 new jobs to the U.S. economy.
A bachelor’s degree in finance can prepare you to work in a number of business roles, including:
- Financial manager (BLS job growth projection, 2022 to 2032: 16%)
- Budget analyst (BLS job growth projection, 2022 to 2032: 3%)
- Credit analyst
- Personal financial advisor (BLS job growth projection, 2022 to 2032: 13%)
- Financial risk specialist
Growing employment opportunities in a variety of corporate, nonprofit, and government settings make finance an exciting and rewarding career. When you combine that with the obvious benefit to your everyday financial decision-making skills, a finance degree could be a smart decision for those seeking a career in business.
Earn Your Finance Degree 100% Online
Purdue Global offers the online Bachelor of Science in Finance and the online Master of Science in Finance, both of which are accredited by the Accreditation Council for Business Schools and Programs (ACBSP). Both degree programs are offered completely online, giving you the flexibility that your busy schedule demands. Take the next step toward a finance degree and request more information today.
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