Knowing the difference between a finance and economics degree is crucial when picking your college major. Many people mistakenly believe that finance and economics are the same. While they both are concerned with money, finance and economics are two distinct fields. Finance is a business discipline that studies how institutions manage their assets or funds. Economics is a social science major that examines how state, national, and global markets distribute resources. Both are increasingly popular on college campuses. According to Niche, universities awarded 98,663 finance degrees in 2019. The number of economics degrees granted was 39,022. The National Center for Education Statistics shows economics and finance programs available at more than 500 U.S. institutions. But, are economics and finance good degrees? Which degree is right for your career goals? Which degree do employers like better? These are some questions the following article will answer by clarifying how economics and finance differ.  

First, we have to admit that finance and economics are very closely related. The two disciplines often converge and influence one another. Both analyze the management of wealth in the economy. Both pay close attention to the health of our financial markets. Economics looks at the big picture of how a region’s buying and selling of goods is going. Professionals with economics degrees study the widespread market trends that will undoubtedly affect finances. Careers in finance then use economists’ information to create successful business strategies. Finance strives to maximize company profits and returns by picking good investments. Minimizing risk to keep organizations in the black is every financial manager’s goal. Doing so would be impossible without learning about broader market conditions. Economics and finance are perhaps two sides of the same coin, one theoretical and one practical. 

Economics and finance degrees mostly differ in the scope of their studies. On the one hand, economics majors study every facet of the economy from production to consumption. They learn how to measure the total value of a region’s gross domestic product. Economists analyze the big details of government-wide policies on trade, tax, and business regulation. It’s their job to pinpoint the specifics of supply and demand in multiple industries globally. Economics students deal with the entire monetary backbone rather than one particular business. On the flip side, finance degrees focus on day-to-day decisions that alter the money cycle. They give students the power to change personal or corporate wealth rather than just watch how the market acts. Financial managers implement their own policies to broker deals and raise income. Economics is a broader, generalized field whereas finance has a narrower focus. 

Generally, finance degrees are awarded by a university’s business school or B-school, according to US News and World Report. Undergrad majors come in two types: the Bachelor of Science and Bachelor of Business Administration. The B.S. option has a strong STEM core of scientific and mathematical courses for quantitative skills. The B.B.A. develops a business core to learn how organizations work and gain leadership abilities. Either is acceptable to fulfill most employers’ bachelor of finance requirement for entry-level jobs. Online finance degree programs are the most flexible for working adults. More finance departments have 100 percent online tracks with 24/7 access. For further study, students can pursue a finance MBA or Master of Science in Finance. Both are post-grad offerings that require a bachelor’s degree first. MBA majors are broader while MSF degrees are ultra-focused on the field. Here are a few popular courses you’ll likely take during your finance degree curriculum. 

Unlike finance, economics degrees can be found in business or social science schools. Four-year Bachelor of Arts in Economics majors have a liberal arts core that emphasizes the humanities and critical thinking skills. Bachelor of Science in Economics options require STEM core courses like statistics and calculus for mastering analytical techniques. Online economics degree programs are slightly harder to find but available for non-traditional students. Continuing for a master’s in economics is usually required for economist jobs. Master of Arts or Science and MBA concentrations in economics involve at least 30-52 credits beyond a bachelor’s. Advanced master’s courses blended with thesis research or capstone projects to solidify your economic strengths. Some economists even complete a Doctor of Philosophy (Ph.D.) and its lengthy dissertation paper for university faculty careers. Economics has higher academic requirements and broader topics. Here are some common courses economics majors may encounter.

Finance degrees have broad applications in the business world. For instance, finance officers or treasurers oversee a company’s funds and implement capital-raising strategies to meet budget goals. Financial risk managers work to reduce the probability of corporate losses by controlling uncertainties. Chartered financial analysts (CFAs) collect organizational data and recommend well-informed solutions to boost profits, according to the CFA Institute. Financial advisors build a loyal client base of individuals and families who need guidance when building a savings plan. Investment bankers work for companies like Goldman Sachs and Barclays to buy or sell securities in capital markets. Portfolio managers diversify clients’ investing accounts to maximize the returns without gambling money away. Investor relations associates present reports that break down complex financial data into terms clients can understand. Loan officers approve or reject lending applications from borrowers based on risk. Other careers include tax examiner, internal auditor, purchasing manager, controller, cash manager, ratings analyst, insurance claims adjuster, and payroll manager. 

Economics majors can pursue some of these careers plus many others. The American Economic Association (AEA) says economics degrees are useful for any professional solving real-life human problems. Economists are master’s-trained officials who research the cost and flow of goods globally. Market research analysts gather consumer and economy data to predict sales trends. Cost estimators review various factors, including economic conditions, to determine the price of goods and services. Actuaries help insurance companies stay abreast of economic changes and reduce their investment risks. Supply chain analysts collect data on manufacturing and shipping costs to identify logistical problems. Environmental economists dedicate their research to judging the results of government climate protection policies. Economic officers work at the U.S. State Department to negotiate treaties and trade agreements that boost our interests. Other jobs include data scientist, health analytics specialist, business development manager, policy analyst, management consultant, economics professor, statistician, and budget analyst.  

Both economics and finance degrees are great for getting a high-paying job. The National Association of Colleges and Employers (NACE) reported an average starting salary of $55,965 for economics majors. Finance students weren’t far beyond with a $55,609 mean wage. These are both over $5,000 higher than the median for all degrees. The U.S. Department of Labor recorded average pay of $116,020 for economists. Financial managers reap median income of $146,830 each year. Financial analysts bring home a mean salary of $100,990. Management analysts are granted an average $94,390. Market research analysts have median earnings of $70,960. Budget analysts are rewarded a mean wage of $79,830. Cost estimators can expect a $69,710 annual average. Tax examiners get median compensation of $90,310. Actuaries enjoy a $116,250 mean yearly income. Loan officers are paid a median $76,270 salary. Securities and commodities sales agents boast $98,770 average earnings.  

Employment prospects are extremely good for both finance and economics majors. However, economics degrees can give graduates an edge over other candidates. There’s increasingly a glut of finance degree holders competing for the field’s enticing well-paid jobs. Fewer competitors with an economics degree could help you stand out. The Bureau of Labor Statistics predicts employment of economists will jump 8 percent by 2028 to 22,800 positions. Demand for financial analysts will increase 6 percent for 20,300 openings. Financial management jobs will skyrocket 16 percent to surpass the 750,000 mark. Only 4 percent more, or 2,400, budget analyst positions will open. Financial planners will benefit from faster-than-average growth of 7 percent for 19,100 positions. Hiring of financial services sales agents will rise 4 percent to 460,900 total jobs. Market research analysts can expect a whopping 20 percent uptick of 139,200 openings. Actuaries have another hot job forecasting 20 percent growth to 30,000 positions. 

Do you understand the difference between a finance and economics degree now? Just in case, let’s reiterate that the main distinction is their scale. Economics studies the prosperity of a society’s goods production on a macro level. Finance studies the organizational methods used on a micro level to increase revenue. Students who prefer empirical research and statistical analysis are likely better suited for economics. Students who prefer applying theories hands-on, working with people, and leading teams might enjoy finance more. Of course, both require strong math, analytical, and decision-making skills. Either can prepare you for an in-demand career that pays six figures. If you’re struggling to choose between finance and economics, perhaps you don’t need to. Many colleges let ambitious undergrads double major in two fields. Graduate schools also provide dual degrees, such as an MSF/MBA in Economics. Pursuing these blended tracks give you the best of both worlds to learn finance and economics together.

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