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A Degree In Finance Does Not Equal Financial Literacy

One of the better financial decisions I’ve made in my life was my choice of a college degree.

Going into college I had no idea what I wanted to do. While I really enjoyed history and playing sports, I realized that those career paths weren’t ones that wanted to pursue.

For history, I likely would have had to become a teacher or professor, which at the time did not interest me (not that there is anything wrong with those professions!). For sports, well, you have to be really, REALLY good at your sport to make a career out of that, and I recognized I just was not on that level.

My dad works in the business world, and has made a successful career out of it. Knowing that the business world held a huge number of opportunities, he recommended I look into degrees in any one of the numerous fields of study.

The college I ended up choosing to attend had a strong reputation for their business program, and after the first year of taking several introductory, required business classes I had zeroed in on my major:

Finance and Economics (sadly, not a double major, just one).

The Merits Of A Degree In Finance

Looking back, making this choice was an easy one. The math aspect and ever changing business landscape made it something that could at least keep me engaged and interested.

Though Finance has never been my passion, it has led to my current life situation, of which I have cannot complain.

Getting a degree in this field was probably the best financial decision I’ve made so far. The reasons behind that are the following:

Job Opportunities/Stability

With a Finance degree you can go into so many different fields. While many people hear “Finance” and assume the job entails some kind of wealth management or banking, when you delve into the field of Corporate Finance, they are nothing alike.

Here are a few career in Finance a degree in Finance can lead you to:

Corporate Finance, Financial Planning, Brokerage Services, Insurance Services, Banking, Project Management, etc, etc. There are too many to list.

This gives you options. If you don’t like your job, company, or salary, there are typically many other companies that you could go work for.

Not only are there lots of jobs in Finance out there, but for the most part, it can be a very stable career. Companies are always going to need people to handle the Finances of their organization, manage projects, and there will always be a need to give financial planning services.

It’s also a field that’s expected to grow in the next decade. Financial advising, analysts and management careers all are expected to hit double digit growth in the next decade.

The number of job opportunities alone is reason enough for people looking for a stable career to get into Finance.

High Pay

In addition to the number of job opportunities, Finance careers can come with solid, competitive pay.

Starting salaries can vary between individual careers within Finance, however they can range anywhere from $40,000 to $70,000 on average, though obviously there are always outliers.

That range is very competitive, and right around or mostly above the median income for all college graduates.

Having a high income is key to building wealth. It’s not the only factor, there is always the personal expenses side of it, but having a higher income can lead to more opportunities and gives you the ability to grow your wealth much faster than people with lower incomes.

Knowledge of How Businesses Operate

Another huge benefit I’ve found by having a Finance degree, is how I can understand how businesses run and operate. Understanding the math and financials behind what drives business decisions can be a huge advantage.

It gives you an overall look at how companies operate, and the tough decisions organizations make on a daily basis to stay competitive in their market.

This advantage not only comes in the business world, but also in personal life too. Combined with the economics portion of my degree, I also understand the basics of how the economy works (something not many can say).

Knowing and comprehending how various policies can effect everything from consumer prices, wages, employment, etc is something that is very useful to know.

While a Finance degree can be great for so many reasons there is one great misconception about it:

People assume that since you have a degree in Finance, you are Financially Literate. Sometimes this could not be further from the truth.

A Degree In Finance Does Not Equal Financial Literacy

I can relate to this firsthand. Though I feel fortunate that I was able to discover the FIRE movement at a relatively young age, I’m kicking myself for not having realized this sooner.

Coming out of college with my Finance degree in hand, I was fairly clueless about how Finances worked in general.

You see, Finance degrees aren’t centered around personal finance. The programs are built to help you understand how companies work and the Finances around businesses.

How to determine the value of a company. What does a high Debt/Equity ratio mean. The importance of F/X exchange rates for companies operates overseas. These were the things my degree taught me.

So many formulas!

These degrees want to make you are marketable as possible to potential hiring companies, so they teach you exactly what they want you to know. It’s great for job prospects as mentioned above.

People assume that financial advisers and investment advisers must be financially literate because they have a Finance degree. This definitely is not always the case, especially for those advisers that are really just glorified Salesman who get commission for pitching investment products.

Though a Finance degree can certainly help your career, when it comes to Personal Finance? Not so much.

During my 3 1/2 years in college, out of the dozens of Finance and Economics classes I took, there was only one personal finance class mixed in. It was an elective.

The teacher who taught it was an old financial adviser, and he was brought up in the old (current?) thinking.

Such exercises and examples we worked on were things like how you needed $5-$10M to retire, affording your nice car and vacation home, saving 10% of your income (well at least that part was good)…

Needless to say, this class barely did anything to advance my understanding of personal finances. In fact, it almost reinforced the idea of needing a consumer lifestyle and that I would need to work my whole life in order to retire comfortably, which did not give me any sort of push to learn to optimize my finances.

Due to my upbringing, I knew that saving was important, but if it had not been for my parents helping to build my budget and placing specific line items on there for savings, it’s hard to imagine I would have done that on my own.

Become Financially Literate

While a Finance degree may seem like the perfect degree to help with your financial literacy, it is certainly not always the case.

I don’t think any degree will specifically focus on that. This means that taking control of learning your finances is up to you.

Conforming to the expectation of society and realizing lifestyle inflation (guilty) as you get older and paid more is an all too common occurrence.

There are so many people out there who do not realize what they are doing. To them, what they’re doing is normal. It’s what society expects!

It’s our job to help people become financially literate, and to help them realize that there are other ways to live life than what society tells you. There are so many people out there like this!

Don’t get me wrong, this is a choice that each and every individual has to make for themselves. Many will not want to change and that it completely fine. Who am I to tell someone how to spend their money?

The important thing is to be able to help as many people simply become aware of the concept of taking control of their personal finances.

Financial literacy is for everyone and ideally will help lead them down the path towards Financial Independence.


Did you ever have this common misconception about Finance degrees? What is the best way to spread financial literacy to others?

14 thoughts to “A Degree In Finance Does Not Equal Financial Literacy”

  1. “Coming out of college with my Finance degree in hand, I was fairly clueless about how Finances worked in general.”

    I got a computer information system degree in college, mainly because it was a business degree and I liked computers, but looking back, out of college you know so little about that subject.

    I spent the next 10 years working in a business office environment and that is where you really learn about the subject.

    1. Totally agree! At my current job, I really only use a small portion of what I learned in school as well. Everything else was on the job.

      Personal finance wise it was all up to outside help and what I could learn and find out for myself!

  2. Really nice post. My father asked me what I want to study in college and I responded with “business”. He pushed me towards an accounting degree because he said it is the building blocks of business.

    Looking back, my accounting career as evolved into much more than just debits and credits. Not just in terms of opportunities within Finance functions of big and small corporations, but from a compensation point of view it has served me well.

    Folks in Finance do have relatively attractive compensation packages because of the heavy responsibilities they undertake from a reporting perspective and a compliance perspective.

    Financial literacy comes with time and experience. Of which, I had none when I graduated college and blew my sign-on bonus on worthless penny stocks in the market.

    1. Totally agree and can relate with everything you said here, though I will say that I sent my sign on bonus to finish laying off debt! 😉

      Definitely agree how it takes time to build financial literacy. Some thing you can only truly learn once you’ve done it and gone through it for yourself. No matter how many people tell you

  3. Nice post! I did not study finance but I had always assumed it was regarding the stock market and becoming an advisor. So I learned something new today already.

    I’m 31 and still don’t know “what I want to do.” Well, I do want to retire early, that’s for sure!! Getting there is another story, haha. I guess I was naive entering college and still am to some extent. I was a great student in high school and college, but I didn’t go to college with a purpose to study anything specific. I just went there because that’s what you do when you graduate high school. As a naive 18 year old, I simply saw it as normal progression and nothing special. It was the next step up from high school and I wasn’t thinking long term. So I went there and was an undeclared major through my freshman year. I ended up choosing sport management simply because I liked sports. I have narrow interests and I remember going through the list of majors and nothing appealed to me. So I settled on that. Pretty worthless in the long run from that perspective I guess, but having a college degree certainly is important. But my job now is nothing related to sport management whatsoever.

    Maybe this is me typically being hard on myself, but that’s my story. I firmly believe you learn far more by actually working in the world than from any textbook or class in college.

    1. Thanks Brian! I think a lot of people still wonder “what they want to do” – I know I do haha. My current career definitely isn’t my passion, it’s just a means to an end. It’s a constant struggle to figure out what I really want to do/what’s my purpose, but I firmly believe we all will arrive at that answer at some point 🙂

    1. Wow I’ve never seen that picture but it’s so true!

      I think the more we normalize talking about personal finance with people we know, the more educated everyone will get. If we can somehow switch off the consumer mindset, we may be able to get somewhere, but sadly that’s just a dream for now

  4. I’m feeling pretty called out here for my “I don’t know what I want to be when I grow up so let’s just pick something that sounds interesting without worrying about job or salary prospects” degree! 😂 But hey, I didn’t learn a thing about personal finance either (shocker) and am very glad I found it relatively early on.

  5. I wish I learned more about finance when I was younger as well; I mean FIRE specifically. Looking back, I think I could have purchased fewer toys, and still been quite happy. Better late than never, though. Ironically, it is the reason I took an engineering job in finance to help force me to learn. I am glad I did that as it did start me down the correct path. Now the question is how much we save, and how soon to retirement. For me, I think I will likely downshift from full time employment to contract work. Time will tell.

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