What Is Finance?

Finance includes personal, corporate, and public financial management. Discover professional opportunities in finance.

portrait of Doug Wintemute
by Doug Wintemute

Published August 29, 2022

Edited by Amelia Buckley
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What Is Finance?
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Finance is the management of money. Individuals, businesses, and governments make up the major players in this field. Within a business, finance involves the management of capital, revenues and costs, investments, growth, and risk.

Financial services facilitate the exchange of goods and services central to our economy. As the economy grows, so too does this sector. As a result, this discipline has become one of the most popular business degrees and careers.

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Types of Finance

Finance features many subfields and specialization opportunities. Students can focus their studies in one area, which helps their job prospects in that sector. Since each field builds on the same fundamentals and foundations, learners can move between sectors and specializations with relative ease.

Personal Finance

Personal finance deals with money management and investments for individuals. Students learn to help clients set up financial goals and investment plans, manage financial risk, and accumulate wealth. Professionals in this field pursue financial planning and advising positions that help individual investors. Given that more than half of the nation's households hold some form of investment, this sector plays an important role in the finance industry.

Corporate Finance

This specialization covers the financial issues that corporations face, such as venture capital, equity structures, and corporate taxation. These professionals have the skills to help organizations make sound business decisions via financial analysis.

Corporate finance specialists take on jobs in corporate development, investor relations, and business treasury departments. They help manage the finances of the country's 6.5+ million corporations.

Public Finance

Public finance deals with national, state, and local government finances and the role of the government in the economy. The specialization covers financial policy, taxation, and government budgets. Careers in this field include tax examiners and specialists, financial analysts, and public financiers, those who raise and allocate resources for public projects.

Professionals in this field understand the main features and institutions involved with public financial management. They also develop skills and strategies for managing government revenues and expenditures, which totalled $4.3 trillion and $7.3 trillion in 2021, respectively.

International Finance

This specialization focuses on the management of multinational corporation finances and understanding international markets and financial regulations. International finance professionals manage foreign investments and international exchanges, adhering to the appropriate laws and regulations.

As of 2018, there were 60,000 multinational corporations, a group that controls more than half of all international trade. Specialists in international finance hold positions such as management and financial analyst, purchasing manager, and investment manager within these organizations, plus many others with international dealings.

Careers in Finance

The career path in finance varies for every individual, but a bachelor's degree in finance or a related subject qualifies graduates for entry-level jobs as personal financial advisors, financial examiners, or accountants.

According to the Bureau of Labor Statistics (BLS), the median annual salary for business and financial occupations was $76,570 in May 2021. The top 10% of earners made more than $130,620.

Accessing the mid-level and senior-level positions may require professional experience or more advanced education, such as a master's in finance, an MBA degree, or graduate certificates in finance. Advanced finance degree programs can also lead to professional certifications and credentials, which help professionals negotiate higher salaries.

Financial Examiner

Financial examiners oversee and analyze the exchanges between financial institutions, individuals, and organizations. They ensure that all transactions and parties adhere to the laws and regulations and that banks and consumers are safe and protected.

Median Annual Salary
$81,410

Career Outlook
18% projected job growth from 2020-2030

Degree Level
Bachelor's degree


Management Analyst

Management analysts review an organization's finances and processes, looking for revenue-improving and cost-cutting strategies. They may suggest operational changes, new systems, or restructuring to make the organization more efficient.

Median Annual Salary
$93,000

Career Outlook
14% projected job growth from 2020-2030

Degree Level
Bachelor's or master's degree


Financial Manager

Financial managers oversee an organization's financial activities. They manage financial goal setting and strategies and provide financial-based insight for business decisions. They may also manage financial risk, tax processes, and budgeting and billing tasks.

Median Annual Salary
$131,710

Career Outlook
17% projected job growth from 2020-2030

Degree Level
Bachelor's or master's degree

To learn more about working in finance, check out our guide on how to become a financier.

Is Finance Right for Me?

Many types of people work in finance, but most possess a moderate-to-high level of analytical, math, and problem-solving skills. The work usually calls for detail-oriented professionals familiar with computers and technology. While most occupations feature independent work, financial professionals are often good communicators with strong interpersonal or sales skills.

The attractive salaries and growth potential make finance a competitive sector. After completing a bachelor's degree to meet the typical minimum requirements, professionals need to regularly update their education and knowledge to stay up-to-date in the industry. Finance hours vary, but most work 40+ hour full-time jobs in office environments.

Pros and Cons of Working in Finance

Pros of Working in Finance

  • Strong entry-level salaries with growth potential.
  • Large and growing workforce that creates opportunities for new professionals and career changes.
  • Diverse job opportunities, including various organizations, industries, and specializations.
  • Financial skills are in high demand in organizations to help inform business decisions and activities.
  • Intimate knowledge about business and operations, which can open doors and lead to new opportunities in the future.
  • Strong knowledge of financial operations can positively influence professionals' own money management skills.

Cons of Working in Finance

  • Stressful work when trying to hit deadlines and meet quotas.
  • Competitive work environment, which requires regular continuing education and self-improvement.
  • Some positions may require working long hours in a fast-paced environment.
  • Dealing with finances and financial decisions can be very personal and sensitive.
  • Many organizations offer contract positions, which may not provide the same level of security as full-time permanent roles.
  • Activities can get repetitive.

The Future of Finance

As the economy continues growing in size and complexity, the demand for financial professionals will follow. The BLS projects 8% growth for the business and financial sector between 2020 and 2030, adding more than 750,000 new jobs during that period.

In the future, the financial sector will aim to digitize, modernize, and personalize more programs and services. This will create opportunities for financial professionals with updated technological skills and consumer experience expertise.

Finance will also continue to drive businesses in their quest to maximize efficiencies, leverage data, improve decision-making, and revise operating models. In addition to increasing organizational investing in entry- and mid-level financial professionals, this could lead to more high-ranking finance positions.

Frequently Asked Questions About Finance

Is finance a competitive field?

Yes. The finance field offers plenty of incentives for aspiring professionals. According to the BLS, median annual wages for business and financial professionals exceeded the median annual wages for all occupations by more than $10,000 in May 2021.

Business and finance education also offers a solid foundation, which gives professionals the opportunity to advance within their field, specialize, or make career changes. This appeals to many prospective students and helps make the discipline part of the most popular major in the country, as per the National Center for Education Statistics.

What are the five principles of finance?

The five principles of finance are: the importance of cash flow, the time value of money, risk and reward, market prices, and problematic conflicts of interest. These principles provide a set of guidelines that can help professionals manage financial decisions more effectively.

Financial professionals should understand these principles and double-check their ideas and plans against them to avoid overlooking something. These principles can be reminders or starting points for many financial discussions and activities.

How much money can I make in finance?

Finance professionals can earn competitive salaries in many positions and industries. In business and financial occupations, the mean annual wage in May 2021 was $82,610, as per the BLS. The lowest 25% of earners in this field made less than $53,410, while the top 25% made more than $100,220.

Some of the largest employment industries paid high mean annual wages in May 2021. For example, company and enterprise management paid $87,310, the federal executive government branches paid $92,030, consulting services paid $92,940, and accounting services paid $82,590.

What are the biggest U.S. finance companies?

According to the Sovereign Wealth Fund Institute, the largest financial holding companies in the country are JPMorgan Chase & Co. and Bank of America, which take up the top two positions globally as well. They each have more than $3.2 trillion in assets.

Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, and Berkshire Hathaway Inc. make up the next largest organizations in the nation. Each of these sits in the top 20 globally.

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