If you find finance intimidating, you’re not alone. When many people think of finance, they envision Wall Street high-rises, fancy suits, and frantic stock tickers.
But it doesn’t need to be intimidating. In fact, anyone can—and should—have a basic understanding of finance.
Here are five reasons why finance is essential knowledge for all professionals, regardless of their role, industry, or seniority level.
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1. Finance Is Ubiquitous
It doesn’t matter if you work in tech or education, consulting or advertising. Your company needs cash flow to do things like pay everyone’s salary, distribute dividends, and reinvest in product innovation.
Even if you don’t manage a budget yourself, finance is at the core of business decision-making. If you’re pitching a project or angling for additional funding, understanding and being able to communicate how you can turn that investment into revenue for your organization will help you make a more convincing argument.
Related: The 4 Finance Skills Every Leader Needs No Matter Their Industry
2. Finance Will Help Your Resume Stand Out
If you're looking for ways to differentiate your resume, finance is a good place to start. Especially if you’re entering the workforce as a young professional without extensive experience, showing you have business knowledge before you’re even in the field can make you a more attractive candidate. This is particularly relevant in non-finance fields, where financial education is less common but no less fundamental to running a successful business.
For example, if you’re hoping to land a managerial position, having an understanding of finance can demonstrate key competencies to employers. Managers with finance skills are able to better understand their team’s impact on the overall company and make well-informed business decisions.
"Whatever business decision that you're going to be making, you want to understand all facets of it," says Harvard Business School Professor V.G. Narayanan, who teaches the online course Financial Accounting. "So there are going to be human resource angles to it. There are going to be marketing angles to it. There are operational angles to it. But there's also: 'What is the impact on the financial statements of this particular decision that you're going to make?'"
Watch the video below featuring Professor Narayanan to learn more about why you should further your financial knowledge if you're in a non-finance role:
3. The Finance Industry Is Constantly Evolving
The world of finance has grown beyond traditional big banks. SoFi, Stripe, and Coinbase may not have existed a decade ago, but they have since revolutionized student loan financing, payment technology, and cryptocurrency, respectively. Understanding finance can help you keep up with the growing field of financial technology, also known as “fintech,” whether you want to work in the industry or become a conscious consumer of its products.
4. You’ll Become a Stronger Problem Solver
Yes, finance involves formulas, Excel spreadsheets, and ratios. But it also involves analyzing these numbers and turning them into actionable business insights. For example, consider the concept of value and its role in business decisions. Learning finance will teach you how to understand the difference between price and value, how to create value, and how the future affects value today.
Learning how to take quantitative data and use it to solve problems and make sound business decisions is a valuable skill that can serve you in your career now and in the future.
Related: Financial Terminology: 20 Financial Terms to Know
5. Finance Is Important Outside the Office, Too
While understanding finance is critical for work, it’s also critical for your fiscal well-being outside the office.
We're faced with financial decisions, small and large, every day. Whether it’s choosing to eat in or order out dinner, paying your gym fees in a lump sum or monthly installments, or turning your hobby into a side hustle, these choices require a basic knowledge of finance.
How to Study Finance
Having a clear understanding of basic financial concepts comes with various benefits and can help you excel professionally. Depending on your specific goals and needs, there are different avenues you can take to hone your financial know-how.
To brush up on your financial terminology and get familiar with some basic concepts, you can start by exploring finance- and business-related articles, websites, and newsletters.
To take a deeper dive into the world of finance, consider enrolling in an online finance course. Choosing a course offered by a top business school can enable you to gain a quality finance education in a format that works for your schedule. In addition, programs that award certificates of completion provide the opportunity to showcase your skills on your resume or LinkedIn profile to help advance your career.
Based on your personal and professional goals, your level of work experience, and other factors, you may choose to pursue a graduate degree in a finance-related field. This could be the right path for you if you’re looking to make a career change or land a position that requires advanced finance skills. In this case, you may find it helpful to prepare for a degree program by taking online courses to build a foundational knowledge of finance.
Related: Should You Go to Business School? 6 Benefits of Strong Business Skills
Understanding Finance Is Critical
No matter how you decide to learn about finance, having these skills can bring success in your professional and personal life.
Why is $1 today worth more than $1 tomorrow? How do you choose where to invest your 401(k)? Knowing these answers is fundamental to developing financial literacy and preparing yourself to make smarter decisions throughout your life.
Are you interested in developing financial literacy? Explore our online finance and accounting courses to discover how you can advance your career by gaining a thorough understanding of financial principles. Not sure which is the right fit for you? Download our free course flowchart.
This post was updated on September 10, 2021. It was originally published on April 23, 2019.
