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It took me a while to come up with an analogy for this one, but here goes:

Let's pretend that you are an economics student looking to purchase a car and you decide to analyze the purchase decision using only economic metrics. What things might you consider?

Do you have a job? If you do, and you lose your job, how hard would it be to find a new one? Is unemployment high in your town? How much do cars cost in your town? How many other people are looking for cars? Are cars cheaper in other towns? Will there be cars in stock for all the other people who want cars? What interest rate are you likely to get if you need to get a loan? Will you consider importing the car from another country? If so, what currency will I pay the buyer in and what is the exchange rate?

After all these questions, you still don't know which car to pick! So, you call your friend who is a Finance student at the same university. Your friend helps you answer the following questions to help with your decision. How much of a car can you afford? What is your debt situation? Will you lease or buy? Should you buy the car now, or wait a year? How fast will it lose it's value? Will purchasing this car interfere with your ability to pay your student loan when it comes due? If you take money out of your savings to buy the car, what amount of interest you would otherwise have earned on your savings?

You now figure that you have enough information, and you have selected your car. Now it's time to get a loan! But the story's not over yet.

The Finance student decides to loan you the money to purchase the car, even though he has checked your credit report and realized that you probably won't pay him back. But that's OK, because he has made loans to other economics students as well, (who also might not pay him back). But that's OK, because the Finance student grouped those loans together, called them a AAA Bond and sold them to his friend in Iceland.

A few years later your car has lost most of it's value and you and your fellow economics students default on your loans. The guy in Iceland as lost all his money, your friend in Finance is now rich, and the global recession of 2007 has begun.

Anyway, I digress.

Finance and Economics are fairly broad subjects so I'll discuss in depth below. To answer your questions specifically, if you want to know how society generates wealth, that's an economics question. If you what to get the most out of your saving/investment decisions, that's Finance.

Here are a few types of finance that you might study at University.

1) Investment Finance: This is the process of managing an investment portfolio. Portfolios are constructed based on risk and return by the purchase of Stocks, Bonds and other derivatives. People in investment finance often work for banks, hedge funds, or investments firms. You could even work on the trading floor or a stock exchange.

2) Corporate Finance: (This is what I do for a living) In corporate finance, Financial Analysts (like me) work on teams that do Forecasts as well as work on what we call Planning and Analysis projects.

Forecasts are usually done on 1. 3, 5 and 10 year time horizons and lay out a set of internal financial statements for use in developing the strategy (internal) and guidance (external). Guidance may or not be reported to the Street (Wall Street). Analysts are then responsible for reconciling the forecast against the actuals. Actuals are financial statements that contain information from the past (ie, quarters in which the books have been closed.)

Planning and Analysis is usually defined as the act of analyzing a particular business decision (such as a new product launch) with the goal of maximizing the value of the company's investment decisions. Most companies use a decision based on a projects Net Present Value (NPV), though there are many other methods of determining the value that a business decision will deliver.

3) Personal Finance: This is the act of developing personalized plans for individuals or families looking to plan for future events such as retiring or buying a house. People who work in this field are often called personal financial planners or personal bankers. People working in personal finance often purchase products created by people in Investment Finance. The goal of this type of finance is to maximize the return on investment for the amount of risk the individual is willing to take.

en.wikipedia.org/w iki/Int. or other form of contract with either another company of a financial institution.

Economics is generally divided into two different sub sections. Macro-Economics and Micro-Economics.

en.wikipedia.org/w iki/Eco.

2) Micro-Economics: This is the study of how firms and households allocate their resources. Micro-economics takes a deep look at supply and demand, and how this is used to determine the prices of goods and services.

In summary, economics tends to be more theoretical and finance is generally more specific, but I think that you do need to know economics to succeed in finance, but you don't necessarily need to know finance to have an understanding of economics.