The common misconception of finance experts is that they are bespectacled math nerds. Financial knowledge is more than just having an aptitude for math. It’s being able to look at numbers and data critically, and being able to make decisions in order to manage money and investments well.
Having a proficiency for finance has many practical advantages, because finance is applicable not just in work but in your everyday life as well. You have daily money transactions. You earn, you spend, you save, you invest. It can’t be denied that finance plays a very big role in an individual’s life and in society, so having even basic financial knowledge can greatly help improve most aspects of your life.
- Personal finance knowledge helps you to spend your money wisely. Personal finance teaches you utilization, or smart use of your money. It teaches you best practices on how to save and how to spend your money. For example, you’ll be more aware of how the stock market works, how insurance works, etc.
- You’ll know how to properly invest your money in order to ensure future financial stability. With financial knowledge, you’ll know how to invest your savings in stocks, mutual funds, or other options; you don’t have to rely solely on the recommendations of a broker or a bank adviser. You’ll understand how best to invest your money according to your personal goals.
- Having knowledge in finance decreases uncertainty and fear in making financial transactions. Because you’re familiar with how to handle business deals and money transactions, you’re less likely to fall victim to fraud, scams, or bad deals. You’ll also be more confident in making transactions, which helps especially during negotiation situations. Moreover, you’ll take more risks – or rather, you’ll engage in transactions that others without financial knowledge might consider risky. But you’ll see the returns through your financial lens. Finance is also a practical choice for a career, because a degree or specialization in finance offers a wealth of benefits.
- You’ll gain soft skills that are useful in any field you pursue, or in any project you undertake. Skills in analysis and decision-making are necessary to have in any and all jobs, especially in management positions. Familiarity with finance can give you an edge in negotiation, whether you’re on either end of the bargaining scenario. Studying finance teaches you to be inquisitive, detail-oriented, risk-taking, and responsible. These skills are important not just career-wise, but also contribute to your personal development.
- A finance background makes it easier for you to climb up the corporate ladder. Management roles, no matter the project, department, or industry, always require you to make decisions concerning money, by handling budgets and making proposals or business cases to get funding. Managers, directors, and other executives need to be able to articulate why their department or a specific initiative needs financial support from the company. Even the littlest of mistakes when it comes to money matters could greatly affect your career; conversely, excellently executing your projects and tasks within your budget (i.e. delivering great ROI) could mean positive performance appraisals and promotions.
- Choosing a career in finance opens you up to considerably many job opportunities. If you decide to pursue a corporate job, you can work in any company in any industry because practically all businesses have a finance or accounting department. And it’s not just businesses – organizations of all kinds need help in managing their financial affairs.
Your job opportunities can also expand to other countries. No matter which part of the world you work in, no matter what currency you are dealing with, the language of finance remains the same.
- You can start your own business or fund your dream job. Ultimately, you can use your financial knowledge to build your own business, fund your passion project, or support a cause you care about. Knowing finance can help you confidently navigate through this endeavor as you deal with banks, government offices, and other problems.
On the flip side, instead of fully backing your startup or project, you can get investors. Investors care first and foremost about profitability, so you need to be able to show them that. Since finance teaches you to look at every investment with a critical eye, you can certainly understand the concerns of investors and see things in their point of view. A financial perspective can help you to better deal with potential investors as well as with potential clients or customers.
Although financial literacy and expertise may seem daunting and difficult to achieve, you actually don’t need a degree in finance to be able to achieve success in your personal and professional life. You can easily study and learn the basic essentials of personal finance through a variety of sites and sections dedicated to finance, such as:
There are also organizations that offer free online courses on finance and its different areas of focus that you can check out, such as: