Choosing a college major is difficult because I feel like it impacts the rest of my life. The skills I develop, the careers I pursue, the opportunities I have post-graduation- they are all impacts of choosing the “right” major. A Finance Major impacts students by showing them the inner workings of the management of money, business, investments, and other economic decisions. Understanding money management and business strategy means knowing how to use financial information in order to make better business and/or economic decisions.
I don’t think people should choose a major simply by the salary or popularity of the field. The major needs to be a good fit according to interests, talents, and long-term goals of an individual. The field of finance is broad and offers opportunities for investigation and analysis, two skills I enjoy using. Finance may be interesting to people who find pleasure and/or meaning in understanding the answer to the questions “why did that company/business/investment succeed” or “why did that one fail”.
There are many factors that come into play when deciding on what to study, as I am considering a finance major. I feel I want to understand the discipline, courses, challenges and career opportunities the field has to offer. Analyzing potential pros, cons, future outlook, salary and career opportunities can help one determine if the field has the right balance between interest and practicality.
What Is a Finance Major?
Studying finance means learning how businesses evaluate investments and financial risks, and how people save for the future and make financial decisions. It means learning how the economy works and how to control, distribute and manage money. The subject is useful because it explains how businesses make financial and strategic decisions.
Businesses must weigh the costs and benefits of opening a new location. Financial teams must use their expertise to project costs and revenue to determine the risks and benefits of the potential expansion. Only then can the company decide if it is worthwhile to spend millions of dollars to open a new location.
A college degree in finance prepares you to understand these decisions by introducing you to the world of financial theory and analysis. You will have many opportunities to hone your skills using case studies and other analytical projects. Some schools, however, put more emphasis on other related areas such as investments, financial planning, banking and financial technology. Some degrees also allow you to focus your studies in these areas with a concentration.
What Do You Learn as a Finance Major?
There is more to the world of finance than simply computing profits and losses. Students learn to read and analyze financial statements, identify attractive investment opportunities, analyze the financial condition of firms, and study how the financial system influences the economy and vice versa. They study how interest rates, inflation and other factors impact the economy and financial markets.
The degree also helps you master the art of making decisions in the face of uncertainty. There are many examples in the business world where money is available to pursue certain goals, but there is uncertainty in the marketplace. Should a business invest in a new product, or wait for the market to be more favorable?
A strong command of financial analysis and the ability to investigate and draw conclusions can give a business an edge. This degree helps you strengthen your ability to explain and simplify complex financial ideas and make them understandable to the general public using research-based reports, graphs, tables, and presentations.
What Courses Are Required for a Finance Major?
Course requirements will vary depending on your institution but will generally involve introductory business courses and courses focused on different areas of finance. Students begin with basic concepts and move on to more advanced subjects.
These topics typically include financial and managerial accounting, economics, and statistics, in addition to corporate finance and financial analysis courses. Some institutions will offer more advanced courses such as international finance, risk management, tax, and financial modeling.
Courses in this area will usually require an understanding of more advanced math concepts. This is typically focused on helping the student understand how to evaluate a company’s finances and analyze investments and business activities. Most programs are focused on the application of business concepts and will not cover advanced concepts of math or finance.
You will have an opportunity to do internships, research, and presentations as part of your coursework. Capstone projects are intended to integrate the knowledge you have gained in the classroom to evaluate your understanding of the finance field. Be sure to review the course offerings from each university to make sure they focus on your area of interest.
What Skills Do You Need to Succeed as a Finance Major?
To be successful as a finance major, you will need good analytical skills, attention to detail and good judgment. While it is helpful to enjoy math, it is not necessary to be a prodigy. A good deal of practicing and studying can help make more difficult topics easier.
The integration of technology in the field is growing, so it is important that you feel comfortable using new programs and software. Knowledge of Microsoft Office and a financial database will help you evaluate the finances of a business and bring information to a format that is easier to comprehend.
These skills are easier to learn while in college, and therefore can help with internships and first jobs.
Being a critical thinker as a finance major means analyzing all aspects of a financial investment. While the investment may look appealing, what is the risk? Will the investment lose money if interest rates rise? Thinking critically about these aspects can lead to better financial decisions.
Lastly, ethical judgment comes into play as financial professionals work closely with clients and are often in a position to influence important decisions. Therefore, they should be honest and act with integrity in order to protect their clients’ interests.
What types of jobs are available with a degree in finance?
There are many different fields and sectors that a finance degree can open, like banking and investments, insurance and risk, corporate operations, management, and financial planning. Depending on a person’s interests and opportunities available, some careers can be in financial analysis and management, investing, and leadership.
A few examples of positions within the fields above include financial, investment, and credit analysis. Some professionals may work with clients and help them formulate financial plans to reach important goals like buying a house or retiring.
How Much Can You Earn With a Finance Major?
The amount of earnings is impacted by many things such as job title, employer, location, experience, and qualifications. An entry-level banking position may pay less than a finance manager position. Compensation may also be impacted by commission and bonuses. Salary should be researched for the specific position. Financial analysts and financial managers have different job responsibilities and different salary expectations. Education may provide a baseline for possible advancement; however, a degree alone may not warrant a high salary.
Before salary is considered, the complete picture must be taken into account, including working hours, job security and potential for advancement. Also, the day-to-day responsibilities must align with one’s interests. For example, would the daily duties require a lot of travel? Does the position require a lot of interpersonal interaction? Does the position offer job security?
Is a Finance Major Difficult?
Easy or difficult is subjective. Depending on your past experiences, a finance major may not require a large shift in thinking. Math is key to finance, and different students learn and understand different concepts quickly. There are a lot of resources available for finance. The lecture notes may be difficult to decipher, but working through sample problems may develop a solid foundation for future understanding and challenges.
An advanced understanding of calculating loan payment schedules may be required, but not understanding that concept may not be a barrier for future challenges. Because of that, it may be best to work on foundational concepts before other, seemingly more advanced concepts. Working through sample problems may develop the understanding required for other challenges.
Rather than memorizing formulas, this student can think through problems related to things like auto or home loans, or bank savings. This creates a greater opportunity for theory and application, and increases understanding of the concepts being taught.
Finance as a major does involve a lot of numbers, but this does not mean it should be discounted. The field does require strong critical thinking and attention to detail. Additional traits like curiosity and the ability to do thorough, in-depth work are just as important as ability and skill in the field.
Is Finance a Good Major for the Future?
Understanding and knowing how businesses and organizations function requires an understanding of not only the financial decisions being made, but the logic behind those decisions. Many organizations hire people with the ability to understand financial decisions, assess risks and opportunities, and analyze costs and budgets. However, demand for certain roles fluctuates due to technology, innovations and changes in the marketplace.
Understanding how something works does not always mean one has to do that something. With the constant fluctuations in the marketplace and the reliance on technology to perform certain tasks, having an integrated knowledge and skill set in finance, technology, and data is critical. This may include an understanding of automation, artificial intelligence and how they relate to financial services.
The knowledge and skill set one acquires as a finance major can be a springboard to other professional and academic certifications and pursuits (i.e. financial planning and analysis, investment analysis, etc.) This also depends on how one chooses to shape their career.
While long-term employment outlooks are optimistic for the field, I would recommend doing your own research to find more up-to-date and relevant information, especially when looking at position requirements, location and the type of organization.
What Is the Difference between Accounting and Finance?
There are a number of questions Finance helps to find answers to, with help of financial information. These can be the optimal level of funding, the best way to spend the company’s money, what investment opportunities to take, how to manage the company’s financial risks and other similar questions.
To return to the example I provided earlier, the accountant will help prepare financial statements to help an investment analyst with research, performance and other anticipated outcomes, and ultimately help in reaching a conclusion on the profitability of a company.
Neither discipline is inherently better; it really comes down to preference, sometimes personality, and long-term career goals and aspirations. When choosing between the two, I suggest taking into consideration the particular courses, jobs, responsibilities, and licensing requirements for each.
What are the Pros and Cons of a Finance Major?
There are a lot of opportunities in a number of industries after finishing a finance major. These include consulting, manufacturing, technology, healthcare, and others. Knowledge in this field gives an individual the ability to make personal financial decisions involving borrowing and investing.
In this field, you can develop a career with well-defined opportunities for specialization. For instance, someone can work as a financial analyst and later as a corporate strategy professional.
Competitive positions can require long hours, tough deadlines, and a lot of responsibility. The financial markets can be unpredictable, and some positions require additional certifications or advanced education. Relevant experience can also be required, making internships valuable.
In my opinion, the major is more financially worthwhile if the student enjoys the field and doesn’t just pursue it to make money. An interested student is more likely to be satisfied, and a student who chooses it for financial reasons may be dissatisfied if they don’t have a true interest in it.
How to Choose the Right Finance Degree Program
When choosing a university, I think it’s important to look beyond facilities and fees. The curriculum needs to cover subjects that interest you. Outside the classroom, research opportunities with employers, work experience, and faculty are important things to look into. Electives and study abroad programs are other things to look into that could add long-term value.
Of course, the cost of the program, size of the classes, school accreditations, and the school’s graduate outcomes are also important. The costs of a school may differ, and a more expensive school may not always be better. Assessing programs this way can help see beyond marketing and rankings and identify true long-term value.
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Conclusion
Understanding what a potential career path looks like helps ease the stress of deciding on a college major. An interest in finance opened my eyes to other aspects I was previously unaware of, such as how individuals make financial decisions and how companies structure their businesses. It has multiple paths, from being a banker to an investment analyst, and from a corporate financier to a financial planner.
Of course, making an education-related financial decision, such as choosing a major, should depend on other factors like one’s interests and goals. I would look into prerequisites, talk to current students and people in the field, and take an internship in the field to help me decide.
Starting with a finance-related degree is a strong starting point, but it is only part of a larger scheme. Experience in the field, continual professional development, and using the education in a thoughtful, strategic way are key to navigating the field.
Frequently Asked Questions
1. What can I do with a finance major?
A finance major can help individuals become a financial or credit analyst, or a personal financial advisor. Qualifications can differ per employer and position.
2. How many years is a finance major?
Typically,y a bachelor’s degree is a 4-year degree program, but structures and credits can change this (i.e transferring credits, part-time study, program structures and of course individual differences).
3. Do I need to be good at math to study finance?
Using basic algebra and statistics, as well as quantitative reasoning, are good foundations. You don’t have to know all the math, but you have to be willing to calculate and analyze financial data.
4. Can I earn a high income with a finance degree?
Yes. Experience, specialization and other factors can lead to good earnings in some finance careers. However, there are multiple factors that lead to a given salary (i.e role, employer, location, qualifications and experience). Good earnings are never guaranteed.
5. Is a finance major worth it?
Having an interest in financial markets and the means to evaluate financial opportunities can be good foundation for looking at the major as an investment. Comparing tuition with career opportunities can also help.
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