Economists generally concern themselves with exchanges in which one of the items traded is money. The use of money greatly simplifies trading, thus lowering transaction costs. Traditional economics focuses on exchanges in which money is one, but only one, of the items traded. Financial economics concentrates on exchanges in which money of one type or another is likely to appear on both sides of a trade. However, both of these aspects are crucial elements in the lives of individuals.
Many decisions involve trading money now for money in the future.
Such trades fall in the domain of financial economics. In many such cases, the amount of money to be transferred in the future is uncertain. Financial economists thus deal with both time and uncertainty. Often the latter is called risk. In many situations, agreements allow one party to make decisions at later times that can affect subsequent transfers of money.