How Studying Finance Can Improve Your Life

Studying finance can help prepare you for careers in the financial services sector, plus you’ll gain increased financial literacy to help you in everyday life. Learn more about the benefits of a finance degree.

What Is Finance?

Finance is an umbrella term that describes activities related to banking, investing, capital markets, credit, and debt. In practical terms, finance refers to all of the money-related decisions consumers, businesses, and governments make on a daily, weekly, and yearly basis.

It’s a popular degree field. The National Center for Education Statistics reports that in 2021–2022, business (the discipline which finance falls under) was the most popular undergraduate degree conferred in the U.S. Of all bachelor's degrees awarded that year, 19% were in business.

What’s the Difference Between Finance and Accounting?

Finance and accounting are separate but related fields. Accounting focuses on collecting and analyzing financial information (e.g., assets, liabilities, etc.). Finance focuses on recommending and implementing various money management strategies.

Whereas an accountant seeks to analyze financial data to produce a report, a finance expert synthesizes that information to generate actionable recommendations.

In other words, finance helps us make better decisions with our money, and accounting enables us to keep track of it. You use finance in innumerable everyday financial scenarios, such as:

• Making a budget for groceries and bills
• Deciding how much of your paycheck you want to save and how much to invest or spend
• Considering whether to pay your credit card balance in full each month

Americans Need Better Financial Education

There's a real need in the U.S. for better financial education. Numerous studies have found that most Americans are lacking when it comes to financial literacy:

• In a TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) survey conducted annually, American adults have correctly answered only about 50% of the survey’s 28 questions every year since 2017. In the same survey:
  • Respondents scored lowest on questions related to understanding financial risk — only 36% of these questions were answered correctly.
  • 42% of non-retirees with very low financial literacy (meaning, they correctly answered 25% or fewer questions) were found to lack adequate emergency savings.
• A survey from the National Financial Educators Council found that financial illiteracy cost Americans an average of $1,015 in 2024.
• A Bankrate survey found that only 46% of U.S. adults have enough emergency savings to cover three months of expenses. Additionally:
  • 30% of respondents had some emergency savings but not enough to cover three months’ expenses.
  • 24% had no emergency savings at all.

This lack of financial understanding and ability to save among Americans underscores the need for financial education.

Finance Skills and Their Benefits in Daily Life

When you understand financial concepts and processes, you’re more apt to apply this insight into your everyday life. Studying finance can help you:

Budget, Save, and Create an Emergency Fund

A finance education teaches you how to analyze your financial situation, budget accordingly, and plan for the unexpected. A recent Bankrate report found that almost 60% of Americans could not afford a $1,000 emergency expense.

Understand How Credit and Interest Rates Work

Interest rates for loans and credit cards vary based on your credit score, and your credit score is based on the soundness of your financial decisions. The average credit card interest rate in August 2025 was 22.83%, the Federal Reserve reports, but your rate may be higher if you have bad credit.

Build Wealth Through Investing

A Pew Research Center survey found that only 27% of American adults are confident about their ability to create an investment plan to build wealth. Studying finance helps you fill this knowledge gap so you understand financial markets, valuation techniques, and risk management — all of which can help you in your personal financial life.

Spot Predatory Scams and Practices

Americans lost a record $16.6 billion to fraud and scams in 2024, according to the FBI's Internet Crime Complaint Center. The report showed a 33% increase in fraud losses compared to 2023. Having a finance education gives you the knowledge you need to identify unscrupulous business practices and financial fraud and avoid expensive mistakes.

Learn to Prepare for Retirement

The fear of running out of money in retirement is real, and the reality of it can be tragic. The National Institute on Retirement Security reported in April 2024 that 79% of Americans believe there is a retirement crisis, up from 67% in 2020. With a degree in finance, you learn the theory and strategies needed to make a secure retirement possible.

See Notes and Conditions below for important information.