DEFINITION of 'Finance'

The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems, which include the public, private and government spaces, and the study of finance and financial instruments, which can relate to countless assets and liabilities. Some prefer to divide finance into three distinct categories: public finance, corporate finance and personal finance. All three of which would contain many sub-categories.


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The study of finance can also take many forms, depending on the field or area of finance which one wishes to study. For instance, economics is considered a pillar of financial science, where both macro and microeconomic factors affect virtually levels of financial decisions and outcomes at all levels. Additionally, the study of behavioral finance aims to study the more "human" side of a science considered by most to be highly mathematical. This illustrates that the study of finance can, at times, be more art than science.

  1. Behavioral Finance

    A field of finance that proposes psychology-based theories to ...
  2. Credit

    1. A contractual agreement in which a borrower receives something ...
  3. Liability

    A company's legal debts or obligations that arise during the ...
  4. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
  5. Asset

    1. A resource with economic value that an individual, corporation ...
  6. Bank

    A financial institution licensed as a receiver of deposits. There ...
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  2. Is finance an art or a science?

    The short answer to this question is "both". Finance, as a field of study and an area of business, definitely has strong ... Read Full Answer >>
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