Budget Analyst vs. Financial Analyst: Which Career Is Right For You?
Each decision a business makes matters. Every expenditure or investment provides opportunities for financial gain or a loss that could have major repercussions. Businesses, organizations, and local and national governments rely on financial professionals to help them analyze their potential expenditures and investments, ensuring they make intelligent decisions for their financial benefit and long-term sustainability.
Two types of professionals who help organizations understand their financial standing and make informed decisions are budget analysts and financial analysts. These financial experts fill a crucial role in the decisions of many businesses, helping them rein in spending or mitigate the effects of bad investments, ultimately contributing to fiscal responsibility. Continue reading to learn more about these two professions, their job markets, and the educational background that could help you step into a career in the field.
Budget Analyst Overview
Budget analysts review organizations’ internal budgets to ensure they’re spending their money responsibly. They help companies compile their current and estimated future spending, as well as revenues, determining how much money they should spend, save, or invest. Budget analysts also assist businesses in organizing their finances, making it easier for accountants and tax professionals to file tax returns and keep businesses within legal boundaries.
Budget Analyst Salaries and Job Outlook
According to the U.S. Bureau of Labor Statistics (BLS), there were 56,900 budget analysts working in the United States as of May 2018, earning a median annual salary of $76,220. The bottom 10% of budget analysts earned approximately $49,860 each year, while the top 10% earned as much as $116,300. The industry that paid the highest median annual salary was professional, scientific, and technical services ($83,890), followed by the federal government ($82,200), local government ($71,420), educational services ($66,350), and state government ($65,420).
The BLS projects the job market for budget analysts to grow 4% between 2018 and 2028, which is in line with the national average. That means there will be 2,400 new job openings for budget analysts, bringing the total market up to 59,400 jobs. The BLS projects the federal government will employ 11,800 budget analysts; educational services will employ 8,000; professional, scientific, and technical services will employ 7,500; and local and state government will each employ 6,100.
Financial Analyst Overview
Financial analysts guide businesses or individuals in making investment decisions. Instead of analyzing their employers’ documents, they analyze other businesses’ financial sheets and the corresponding markets. Through this process, they help determine whether their employers should invest money, withdraw money, or hold steady. Financial analysts examine current and historical financial data, market trends, projections, tax returns, and other documents to get a clear financial picture of a business, investment opportunity, or scenario. They then provide recommendations based on that research and industry knowledge.
Financial Analyst Salaries and Job Outlook
The BLS indicated there were 329,500 financial analysts working in the United States as of May 2018, making a median annual salary of $85,660. The bottom 10% of financial analysts earned approximately $52,540, while the top 10% earned as much as $167,420 each year. The industry that paid the highest median annual salary was securities, commodity contracts, and other financial investments ($101,410), followed by professional, scientific, and technical services ($85,540); management of companies and enterprises ($83,640); credit intermediation and related activities ($81,420); and insurance carriers and related activities ($78,870).
The BLS projects the job market for financial analysts to grow 6% between 2018 and 2028, which is slightly above the national average during the same time span (5%). That growth equates to 20,300 new domestic financial analyst jobs. Jobs in computer systems and related design should jump 24.3%, with 2,000 new positions in that industry, while professional, scientific, and technical services will add 6,700 jobs, a 15.3% jump.
Similarities Between Budget Analyst and Financial Analyst
Budget analysts and financial analysts are financial professionals who most often work in the business offices of different industries. These careers involve working with numbers, spreadsheets, tables, and projections, and professionals in both aspire to create accurate analyses of a business, industry, or investment. Budget analysts and financial analysts answer questions for their employers or clients, such as whether an investment or expenditure is wise. Both careers are in growing job markets, and at times, these professionals fulfill the same responsibilities in certain companies.
Differences Between Budget Analyst and Financial Analyst
While budget analysts and financial analysts have some similarities and sometimes perform similar job duties, there are several aspects of these professions that set them apart. Their educational backgrounds, specific responsibilities, and common work environments are some of the ways in which these jobs differ.
Budget analysts benefit from an undergraduate degree that emphasizes accounting or finance. This often means aspiring budget analysts major in business, mathematics, or statistics. These programs enable them to run complex calculations and understand the financial spreadsheets they’ll be poring over.
As financial analysts deal more with projections and markets, they benefit from an undergraduate degree that emphasizes computers, technology, and other technical skills, though knowledge of finance or accounting is still necessary. Finance degrees with courses in data science or computer science-related topics can lead to jobs in financial analysis.
Budget analysts perform their job duties to help businesses control spending or to spend more wisely. They do not evaluate potential investments, analyze markets, or otherwise analyze situations external to the company. Instead, they focus on cash flow and revenue, making sure the company isn’t operating with unmanageable debt.
Financial analysts give businesses advice on potential investments and provide counsel so they can make wise financial decisions. Their job involves projecting the future in different industries and markets and understanding how trends will continue or change beyond the current fiscal year.
The most common work environment for budget analysts is in government, at any level. Government budget analysts ensure public accountability and track spending in areas where every dollar is important. They also work in financial firms, healthcare, and education.
Financial analysts work in industries that generate enough money to make investments. They tend to work in banks, financial institutions, credit unions, and other types of companies that invest and diversify portfolios up to millions of dollars.
Budget Analyst vs. Financial Analyst: Which Is Right for You?
If you’re interested in a career in financial or budget analysis, an advanced degree in a numbers-centric discipline can help you stand out in the crowd. Whether you’re interested in crunching numbers and creating a budget for a single institution or broadly analyzing markets, a degree that offers practical skills and business strategies can boost your ability to step into a rewarding role in either profession. Explore how Maryville University’s online Master of Science in Accounting can help you prepare to guide the financial decisions of an organization and lead it to success.
Four Reasons to Get Your Master’s in Accounting Online