Non-specialists usually say: “Finance is money; ϶ᴛᴏ the funds available to the enterprise.”

Money and finance differ sharply from each other in their content and in the functions they perform. Finance represents economic relations associated with the formation, distribution and use of centralized and decentralized funds of funds in order to perform the functions and tasks of the state or an individual enterprise and ensure conditions for expanded reproduction, i.e. they have the meaning of a derivative of money.

Money is a means of payment for goods (services, works), a means of measuring value and a means of storing value. Money is a very complex economic category; the well-known phenomenon of money still remains a mystery: why does an increase in the number of banknotes in an individual increase his individual wealth, but the growth of the money supply of society as a whole does not contribute to an increase in the wealth of society?

Money is a sign of exchange, which participates as an intermediary in the exchange of one product for another.

Some modern Russian economists, i.e. economists of the Russian market economy, consider money to be one of the types of securities, the specific feature of which will be the relative autonomy of their movement and the possibility of accumulation.

Money performs completely different functions than finance.

Finance performs three functions:

1. formation of cash funds and receipt of cash;
2. use of funds and cash;
3. test.

Some economists believe that finance performs only two functions: distribution and control.

K. Marx identified five functions of money: a measure of value, a means of circulation, a means of payment, a means of accumulation and savings, and world money. Moreover, he named the measure of value as the first.

Over the past 150 years, economic science has made great progress. Many modern economists distinguish three functions of money:

1. medium of exchange;
2. a means of measuring value (i.e., a measure of value);
3. a means of accumulating and storing value.

Let's look at the differences between finance and money in the following example.

A citizen lends money to another person. This means that the citizen has transferred to another person a tangible thing in the form of a banknote. In other words, money is a thing that, like any other thing, can be lost, found, destroyed (tear paper banknotes)

But the relationship of a citizen who lent money to another person is already a financial relationship. The citizen acts as a creditor, and the person who borrowed money acts as a borrower. Will the lender take a receipt from the borrower, will he take any thing as collateral, will he charge interest on the money lent and interest on failure to repay the money on time, etc. - all this represents a financial relationship.

The essence and signs of finance

The concept of “finance” is inextricably linked with money and commodity-money relations. In the conditions of commodity-money relations, there is a continuous process of movement of money, its transfer from one owner to another. The concept of “finance” is often identified with the concept of “money”. However, these are two different but interrelated concepts. Finance differs from money, both in content and in the functions performed.

Money is a special kind of commodity that spontaneously emerged from the social mass of goods. Their peculiarity is that they essentially represent a universal equivalent with the help of which the labor costs of associated commodity producers are measured.

The main purpose of money is expressed in its functions:

1) measure of value; 2) means of circulation (exchange); 3) means of payment;

4) means of education, accumulation and saving; 5) world money.

The main purpose of finance is that by creating cash income and funds, the needs of the state and enterprises for funds are met, and also ensures control over their expenditure.

Table 1.1

Money	Finance
Universal equivalent by which the costs of associated commodity producers are measured	An economic instrument for the distribution and redistribution of GDP and income, a tool for controlling the formation and use of funds.
Perform five functions (see above).	Functions of finance: a) distribution; b) stimulating; c) control.
Arose before finance.	They arose later than money.
A more general economic category.	Secondary category, derived from money.
Cover broad economic relations.	Covers narrower economic relations associated with the formation of monetary funds.

Signs of finance:

1. Financial relations have a monetary basis.

2. Subjects of financial relations have different rights in the process of these relations, one of them, the state, has special powers.

3. In the process of these relations, a national fund of funds is formed - the budget, therefore we can say that these relations are of a fund nature.

4. Regular receipt of funds into the budget cannot be ensured without giving taxes, fees and other payments a state-compulsory nature. This is achieved through the rule-making activities of the state and the creation of an appropriate fiscal apparatus.

Definition of Finance:finance - this is a system of monetary relations in society regarding education and the use of centralized and decentralized funds within the framework of the distribution and redistribution of GDP and national income to solve the economic, social and political problems of the state.

Money is a prerequisite for the existence of finance.

However, not all monetary relations are financial relations.

Example: financial relations - receiving wages;

monetary relations - payment of housing and communal services, purchase of goods.

Identifying the distinctive features of the categories “finance”, “money” and “credit”

There is no doubt that the category “finance” is close in meaning to the category “money”, but there are also fundamental differences between them, since money is a more general concept (Table 2.1)

Table 2.1 - Difference between money and finance in content

Having money is one of the prerequisites for the existence of finance. However, money is not finance and does not determine the essence of finance, its internal content and social purpose.

Table 2.2 - Difference between money and finance by function

Finance is structured monetary relations reduced to a certain system of capital (fixed, working capital), cash funds, and the like. Any form of capital, having a valuation, begins its movement thanks to the acquisition of a financial form.

Consequently, money is a technical means of finance; on its basis, the amounts of income and expenses are determined, which determines the monetary dimension and the nature of finance.

Financial relations are part of monetary relations; their sphere is already monetary relations.

The difference between finance and money is that financial relations always have a connection with the formation of monetary income and savings, which acquire a specific form of financial resources.

Credit is especially closely connected with money, and this connection is increasingly intensified as social production develops and economic relations become more complicated. However, credit differs from the category of money (Table 2.2).

Credit differs from money (as money) in the following ways:

• - they have a different composition of subjects - carriers, respectively, of monetary and credit relations: in the first case they are the seller and the buyer, in the second - the lender and the borrower, who may not coincide;
• - they have a different nature of the movement of value: in purely monetary relations there is a counter, equivalent movement of two different forms of value - commodity and monetary, and in credit relations - an unequal movement of value in monetary or commodity form;
• - they have different social purposes in the process of reproduction. Money is intended to ensure the realization of consumer value and bring it to the end consumer. They are also a means of accumulating realized value. The loan is intended to satisfy the temporary needs for additional funds of some economic entities and to facilitate the profitable placement of available funds for others. Even if the loan is carried out in monetary form, its inherent purpose does not change. And vice versa, if a loan (instead of money) ensures the delivery of the produced value to the final consumer (sale of goods with deferred payment), it does not replace money in the realization of this value: when the loan matures, only money can provide an equivalent payment for the goods, although it acts it is in the form of repaying the debt of Vovchak O.D. Credit and banking: textbook. allowance - Rostov-on-Don: Phoenix, 2010. - 421 p.;
• -- credit for the area of ​​use is a “narrower” category than money. Money serves the sale of all GDP (except barter), distribution and redistribution of its value, and credit serves the movement of only part of GDP in the process of reproduction. Therefore, participants in monetary relations are all legal entities and individuals of the society, and in credit relations - only a certain part of them;
• - the movement of money from one economic entity to another (in non-credit relations) is always accompanied by a change in the owner of the corresponding value represented by money: ownership of money passes from the payer to the recipient. When a credit transfer of value occurs, the creditor always remains its owner. Even when selling goods on credit, the seller retains ownership of them, which is confirmed by the return of the cost when the buyer repays the debt.

So, credit and money are two independent economic categories, each of which has its own specific purpose, scope of use and nature of the movement of value.

There are significant differences between credit and finance. Unlike credit, finance is formed in the process of value distribution, while credit is formed in the process of redistribution. The movement of value in financial relations is associated with a change of ownership, is not repayable and paid, and is determined primarily by non-market, administrative-volitional factors. Finance and credit operate primarily in parallel, in separate economic segments, complementing rather than replacing each other. And even in cases where finance and credit are used in the same economic segment, they are not depersonalized, but retain their specific specificity Logutova T.G. Money and credit: lecture notes. M., 2009..

For example, in the execution of the state budget, both purely financial relations (taxes and budget financing) and credit relations (government loans) can be used. However, if financial relations are largely completed after the end of the budget year, then credit relations will continue until the state repays the entire amount of public debt associated with the formation of a specific budget.

Credit also differs significantly from trade, first of all, in the unequal movement of value during lending. In trade, the movement of value is carried out on an equivalent basis. At the same time, credit and trade are also closely intertwined: trade is increasingly carried out on credit, and credit is organized on the principles of trading in debt obligations.

The modern world evaluates the success of projects and investments in material terms, placing the economy at the forefront of the development of society. At the everyday level, we often confuse two categories: finances and money. They came from the economic sphere, but at the moment they have significantly changed their meaning. What is the difference between them and can these categories be considered synonyms in a certain sense?

Finance– economic relations related to the collection, distribution and control of the use of funds. Their most important feature is a constant flow that never stops or ceases. Finance arises in the process of cash flow and has different levels: international, state, regional, personal. Participants in legal relations form unique markets: foreign exchange, stock, money, where a wide range of tools are used to regulate behavior. In the common understanding, finance refers to assets that are concentrated in the hands of an individual or legal entity.

Money– a universal product accepted for payment for any product that is not prohibited for circulation in a certain territory. It can be used in cash and non-cash form, as well as as an equivalent (precious metals and stones, real estate). Money is used to accumulate income, exchange goods, invest, and stimulate financial and economic activity. The universal means of expressing their prices are currencies: convertible and non-convertible.

Difference

The definitions of the categories indicate that the scope of the concept of “finance” is much broader and includes, among other things, commodity-money relations. Any transactions that occur between states, organizations and individuals are somehow reflected in GDP. Consequently, they are included in the scope of financial relations. In the United States, budget replenishment and settlements with creditors occur 24 hours a day, and if the influx of funds is stopped, there is a threat of technical default.

So, the most important difference between these categories is their functions. Money is used to determine the value of goods, savings, payments, and foreign economic relations. Finance performs a control, distribution, stabilizing and regulatory function. If there is too much cash in circulation, it loses value, and national banks pursue policies to reduce it. If money is spent on entertainment instead of education, politicians redistribute financial flows by changing the spending functions of the budget.

Conclusions website

1. Scope of the concept. Finance is a narrower concept, which also includes monetary relations.
2. Origin. Money appeared at the dawn of modern civilization and was used as a universal commodity. Finance arose along with the centralization of state power and the development of economic institutions.
3. Functions. Money is used for accumulation, payment, determination of value, and international settlements. Finance is designed to direct and redistribute cash flows, stabilizing prices, controlling income and expenses.
4. Certainty. You can always count money, find an equivalent to a certain amount and find an expression for it. Financial relations represent a set of cash flows, so it is not always possible to express them in any form.

Cash".

Money and finance differ sharply from each other in their content and in the functions they perform. Finance represents economic relations associated with the formation, distribution and use of centralized and decentralized funds of funds in order to perform the functions and tasks of the state or an individual enterprise and ensure conditions for expanded reproduction, i.e. they have the meaning of a derivative of money.

Money is a means of payment for goods (services, works), a means of measuring value and a means of storing value. Money is a very complex economic category; the well-known phenomenon of money still remains a mystery: why does an increase in the number of banknotes in an individual increase his individual wealth, but the growth of the money supply of society as a whole does not contribute to an increase in the wealth of society?

Money is a sign of exchange that participates as an intermediary in the exchange of one product for another.

Some modern Russian economists, i.e. economists of the Russian market economy, consider money to be one of the types of securities, the specific feature of which is the relative autonomy of their movement and the possibility of accumulation.

Money performs completely different functions than finance.

Finance performs three functions:

1. formation of cash funds and receipt of cash;
2. use of funds and cash;
3. test.

Some economists believe that finance performs only two functions: distribution and control.

K. Marx identified five functions of money: a measure of value, a means of circulation, a means of payment, a means of accumulation and savings, and world money. Moreover, he named the measure of value as the first.

Over the past 150 years, economic science has made great progress. Many modern economists distinguish three functions of money:

1. medium of exchange;
2. a means of measuring value (i.e., a measure of value);
3. a means of accumulating and storing value.

Let's look at the differences between finance and money in the following example.

A citizen lends money to another person. This means that the citizen has transferred to another person a tangible thing in the form of a banknote. In other words, money is a thing that, like any other thing, can be lost, found, destroyed (tear paper bills).

But the relationship of a citizen who lent money to another person is already a financial relationship. A citizen acts as a creditor, and the person who borrowed money acts as a borrower. Will the lender take a receipt from the borrower, will he take any thing as collateral, will he charge interest on the money lent and interest for failure to repay the money on time, etc. - all this constitutes a financial relationship.