"Being in control of your finances is a great stress reliever"

Most of us take never think that how finance could affect our lives. Finance influences all of our everyday decisions, from the clothes we wear to the friends we keep, as well as which houses we buy and which jobs we take.

For this reason, if you are planning on pursuing any sort of degree in business or management, it’s important to have at least a basic understanding of the subject. After all, when you don’t know what an asset is or how the stock market works, how can you hope to make smart financial decisions?

What is Finance? 

Finance is a social science that studies how people, firms, governments, and markets make decisions about allocating scarce resources. It deals with issues related to investments, loans, credit, and stock markets. According to some economists, finance has come to dominate business as more companies’ activities are focused on financial engineering instead of real engineering (product design).

Three (3) Main Types of Finance;

1.   Personal Finance

Most people are aware of personal finance, whether or not they have actively taken steps to become better at managing their money. Personal finance is simply about how an individual spends and saves his or her income—not to be confused with personal wealth, which is a different concept entirely. Saving money can help you achieve your financial goals by ensuring that you will have enough funds available when you need them.

If you have nothing to manage, you will never understand why finance is so important. Think about it; what do you need in your life? A car, a house, clothes, and many other things right? Well, all these require money to be bought or at least paid for them.

2. Corporate Finance

This is how a company raises money (or capital) and how it uses these funds. Corporate finance also refers to what companies spend money on, including acquisitions, expansion plans, research & development, and sales. 

Investors are often interested in corporate finance to get a sense of how well a company is doing at different stages in its life cycle. When evaluating a stock as an investment, you’ll want to look at metrics like revenue growth rates or cash flow margins.

3. Public Finance

Public finance is simply how Governments raise revenue and pay for things. Public finance looks at both taxation and non-tax revenue generation. Taxation is when a government gains funds by taxing its citizens through different methods such as property tax, sales tax, income tax, and so on. 

The other form of non-tax revenue generation comes from private businesses that are contracted with public entities to provide goods or services for use in exchange for payment.

Conclusion

The world runs on money. And if you don’t want to end up broke, it pays to understand how it works. From personal finance to corporate finance and public finance, financial planning relies on numbers that make sense only when you first understand what they are all measuring. 

Whether you want to invest in a company or buy your own home, knowing what factors drive these complex transactions will help put you in a position to make well-informed decisions. 

That way, whether it's business or personal finances that interest you, there's nothing standing between you and success but understanding—and that's always easier with a little education.