Students often struggle to distinguish between Economics and Finance and therefore do not know which of the two they should apply to study at university. Although there are some similarities between the two, each subject has its own defining characteristics and distinct features. If you need help you deciding which course is better suited for you, we’ve got you covered!
Economics is a social science which is quantitative in nature and relies heavily on maths. In simple terms, the purpose of Economics is to explain how the global economy works. Understanding the production, consumption, and distribution of goods and services is vital, as well as being able to identify how consumers and producers react to changing environmental conditions, both internally and externally. Economics can influence policy-making at a national level, therefore a focus on how the government affects the market is required; for this an in-depth knowledge of government laws and policies is essential.
There are two types of Economics degrees: Bachelor of Science and Bachelor of Arts. A Bachelor of Science focuses more on mathematics, statistical theory and techniques for the application of mathematics in economy theory, whereas a Bachelor of Arts is combined with humanities based modules such as Sociology and Psychology. This degree can also be offered as part of a joint or combined honours degree, alongside complementary subjects including Computer Science, Engineering, Management, Mathematics, and Politics, to name a few.
To qualify for an Economics degree, students must have an aptitude for numbers along with an interest in analysing problems and understanding current affairs. Upon completion of an Economics degree, students can seek employment as an Economist, Chartered Accountant, Investment Analyst, or Statistician.
Finance, on the other hand, focuses on the ways in which individuals, businesses and organisations raise, distribute and use monetary resources. Analysing price trends and knowing how to minimise risk is key for Finance as companies rely heavily on this in order to monitor their incomings and outgoings. Finance can inform business managers and investors on how to evaluate business plans effectively, in order to allocate capital and ensure that the overall outcome is profit, as opposed to loss.
A finance degree will provide students with an introduction to basic finance skills, such as finding out how wealth is measured and how finance can influence businesses. While a degree in Finance does differ from an Economics degree, there is some overlap in the form of Economics and Statistics as these are crucial to the understanding of Finance.
However, additional optional modules usually include Taxation, Audit, Business Strategy, Business and Employment Law, and Risk Management. Possible careers after completion of a Finance degree include Finance Management, Financial Analyst, Financial Consultant, and Financial Planner, usually working for private companies or organisations. Students may also opt for careers in Commercial Banking or Insurance.
To summarise, Economics is more concerned with the overall market, focusing on specific countries and regions, whereas Finance relates more to companies and the industries they are involved in. Choosing between the two can initially seem quite difficult as at face value they appear to be very similar. However, the subjects are quite varied and provide very different employment prospects. In order to determine which is right for you, you need to think about your future career goals and which course is the most suitable to help you get there.
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