Public finance is a specific branch of the financial services industry. It focuses on the spending of organizations in the public sector, essentially government agencies. Public finance is critical for:
- monitoring the collection of taxes
- production of public goods
- distribution of government funds
Professionals working in public finance are given the duty of ensuring the financial health of public sector organizations. Most public finance analysts carefully review financial systems at play in governmental bodies to improve efficiency. Public finance plays an important role in making certain taxpayer money is being used as effectively as possible. There must also be a high level of transparency. Public finance checks that these are paid for in a well-functioning society:
- public transportation
- schools
- healthcare
- infrastructure
- other necessities
Salary
According to the BLS, the 262,610 financial analysts working across all sectors in the United States earn an average yearly salary of $92,250. This could be equated to a mean hourly wage of $44.35. In particular, analysts in public finance make an annual average of:
- $69,210 in local government
- $69,060 in state government
- $99,080 in federal government
Beginning Salary
When first starting out in public finance, you can expect to land in the bottom tenth percentile of earnings with a yearly income around $48,170. Public finance professionals who have years of experience and senior-level roles in the federal executive branch often bring home upwards of $154,680 each year.
Key Responsibilities
Analysts and managers working in public finance share the responsibility of closely monitoring financial details about their public sector organization to meet long-term monetary goals. On a typical day, public finance professionals may be involved in:
- preparing financial statements
- ensuring compliance with legal regulations
- mapping out budgets
- reviewing government finance reports
- brainstorming ways to cut costs
- analyzing market trends
- seeking opportunities to better use taxpayer money
- helping officials form good financial decisions
They serve public sector clients to meet the complex investment banking needs of municipalities. Public finance analysts work closely with various finance-related teams to address challenges specifically faced within the public sector.
Necessary Skills
To work in public finance, you need analytical skills to use a logical approach in sorting through various figures in your public sector organization. Having basic mathematical skills is essential to ensure accuracy in financial reports. Public finance requires solid interpersonal skills because you’ll need to present your findings on the organization’s financial health both orally and in writing. Good organizational and time management skills with a keen attention to detail will be helpful in maintaining government records. Since public finance deals with complex financial information that must be transparent, professionals should also have:
- integrity
- honesty
- discretion
Degree and Education Requirements
Before leaping into your dream job in public finance, you’ll need to earn at least a four-year bachelor’s degree. Most aspiring public finance analysts will attend an accredited college to major in finance. Some undergraduates may get their start by studying:
- business administration
- accounting
- economics
- statistics
- or mathematics
Taking elective courses in government finance to learn the ins and outs of financial matters in the public sector is critical for career preparation. Going the extra step to earn an MBA or master’s degree in finance can be wise for unlocking upper-level public finance management positions and securing higher pay.
Pros and Cons of the Position
Working in public finance will provide plenty of advantages and disadvantages that you should weigh carefully before picking your career path. On the positive side, public finance jobs will reward your hard work with a high salary that’s above most government workers. Potentially making six-figures early on in your career is possible. Public finance professionals work in a comfortable, climate-controlled office. Finance jobs in the public sector can be found in cities across the country for flexibility. Most will also work regular business hours, even though some overtime may be required to meet deadlines.
On the other hand, public finance is a fast-paced career that delivers a wealth of stress. Public finance professionals may feel pressured to perform superbly to protect the government’s funding. Financial services is also a cyclical industry, which means fierce competition and iffy job security in economic downturns.
Getting Started
Getting a head start on your career is important to make yourself marketable. While earning an appropriate education, you should take on internships to get your feet wet in handling organizational finances and building networking connections. Internships can turn into full-time public finance jobs, so don’t miss this opportunity. Once you have a bachelor’s, start applying for entry-level financial positions to gain experience. It may be helpful for moving into public finance to work as a:
- budget analyst
- ratings analyst
- risk analyst
- accountant
Providing your authority with professional credentials is smart too. For instance, you could become a Chartered Financial Analyst (CFA) after having four years of experience and passing three exams. There’s also a Certified Public Finance Officer (CPFO) program. It’s offered through the Government Finance Officers Association (GFOA) for candidates who pass five examinations and take continuing education credits.
Future Outlook
America remains an international financial center, so there will continue to be a large demand in public finance to plan, direct, and coordinate public funds. Stricter regulations being placed on financial matters to reduce taxpayer money scandals will also create more jobs in public finance. The Bureau of Labor Statistics reports that the overall employment of financial analysts will grow faster than average at 16 percent before 2022. Public finance jobs may grow slightly slower because budgets for government agencies remain tight. Strong competition is expected for these lucrative positions among business school graduates. The best job prospects in public finance will likely be found in municipal, state, and regional government organizations.
Overall, public finance is a specialized niche of financial services that includes money-related positions in:
- local government
- state government
- regional government
- federal government
Public finance ensures the effective management of public money for carrying out policy objectives. Jobs in public finance can vary from analyst to manager and director positions to provide room for advancement. If you choose to focus your financial expertise in public finance, you’ll have the rewarding chance to make a solid salary. You will also help maximize our government’s money to improve our society.
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