For the everyday person, finance and economics may sound like the same thing. Although they are both business-related topics, they are, in fact, very different. The main topics of a finance degree are financial markets, investments, and money management.
In contrast, an economics degree covers economic systems, public policy, and micro- and macroeconomic principles. People interested in these areas can make informed decisions about their academics and career paths once they understand the distinctions between these two degrees. Hence, this article will address the difference between finance vs. economics major and finance vs. economics jobs and salaries.
What Is Finance?
Finance studies how individuals, businesses, and organizations manage and allocate their financial resources. It involves analyzing and making decisions about using money, investments, and financial instruments such as stocks, bonds, and derivatives.
Personal and business finance are the two main divisions in this area. Personal finance is the study of the financial choices that people or families make, including retirement planning, budgeting, and saving.
On the other hand, corporate finance is concerned with the financial decisions companies and organizations make, such as risk management, capital budgeting, and financial planning.
Modern societies require the use of finance. It is crucial in determining the overall health and development of economies and businesses. The demand for professionals with financial knowledge is strong across many industries, including banking and investment management.
What Is Economics?
Economics studies how people, organizations, and societies distribute and employ resources, such as capital, labor, and land, to create goods and services. It examines how economic agents choose what to produce, how, and for whom.
Microeconomics and macroeconomics are the two main subfields of economics. Microeconomics studies how particular economic agents behave, such as households, businesses, and markets. Macroeconomics, on the other hand, examines how the entire economy behaves, including issues like inflation, unemployment, and economic expansion.
Economics is critical in shaping public policy and guiding public and private decision-making. It analyzes and addresses various economic issues, including income inequality, environmental sustainability, international trade, and economic development.
Professionals with expertise in economics are in high demand across numerous industries, such as government, consulting, and academia.
Finance vs. Economics Degree: What’s the Difference?
The main difference between a finance degree and an economics degree is the focus and scope of the study. A finance degree focuses on the practical aspects of managing money and financial assets.
On the other hand, an economics degree is more theoretical and broad-based, covering a wide range of economic concepts and principles. While both degrees overlap in certain areas, there are still many differences.
A finance degree typically includes courses such as:
- Financial Accounting
- Corporate Finance
- Investment Analysis
- Risk Management
- Financial Markets and Institutions
These courses give students knowledge of financial tools and strategies while concentrating on the practical aspects of managing finances, financial markets, and investments.
An economics degree typically includes courses such as:
- Principles of Microeconomics
- Principles of Macroeconomics
- Economic Theory
- International Economics
These classes give students a thorough grasp of how people, businesses, and governments act within the economy by concentrating on economics theoretical and empirical aspects.
Mathematics, statistics, and data analysis classes are included in both finance and economics degrees to help students develop the quantitative skills required to evaluate financial and economic data.
To be successful in either of the two areas, you must have a certain set of skills. Skills developed through a finance degree primarily focus on teaching students how to manage money, evaluate risks and returns, and make wise investment choices and include:
- Financial analysis and modeling
- Investment analysis and portfolio management
- Risk management and mitigation strategies
- Understanding of financial markets and institutions
- Financial planning and forecasting
- Knowledge of financial regulations and compliance
- Business and financial strategy development
- Communication and presentation skills
Skills developed through an economics degree concentrate on examining and comprehending economic systems, policies, and behavior and making public policy and economic development recommendations. They include:
- Analytical and critical thinking
- Quantitative analysis and data interpretation
- Economic theory and policy analysis
- Understanding of micro and macroeconomic principles
- Knowledge of international economic systems and policies
- Research and report writing
- Public policy analysis and development
- Communication and presentation skills
Is One Degree Harder Than the Other?
You might be wondering, “Is finance harder than economics or the other way around?” Whether a finance degree or an economics degree is harder can depend on the individual’s strengths, interests, and career goals. Although an advanced understanding of mathematical and quantitative concepts is necessary for both degrees, the focus and depth of the study vary.
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As a finance degree heavily depends on financial analysis and modeling, students may find the material more difficult if they struggle with mathematical concepts. However, students seeking an economics degree might have difficulty understanding abstract ideas like economic theory and policy analysis.
Choosing a degree that aligns with your interests and career goals is essential, as this can help you stay motivated in your studies.
Finance vs. Economics Jobs and Salaries
Both finance and economics offer various job opportunities with competitive salaries. According to the Bureau of Labor Statistics (BLS), the U.S. median wage for business and financial occupations was $76,570 in May 2021. However, the specific jobs and salaries may vary based on the two degrees’ focus and scope of study.
Jobs in finance may include:
- Accountants and Auditors – $77,250
- Budget Analysts – $79,940
- Cost Estimators – $65,170
- Financial Analysts – $95,570
- Project Management Specialists – $94,500
- Economics Teachers – $104,940
- Environmental Economists – $105,630
- Financial and Investment Analysts – $91,580
- Financial Risk Specialists – $100,000
- Political Scientists – $122,510
The Bottom Line
Choosing between a degree in economics or finance depends on your interests and career goals. A finance degree might be more suitable if you are interested in managing investments, financial planning, or business finance. An economics degree might be more appropriate if you are engaged in economic research, policy analysis, or public service. Ultimately, the decision is yours.