Financial satisfaction of people in the U.S. rebounded strongly in the third quarter of the year, according to a new survey by the American Institute of CPAs, reversing the lows in the second quarter in the midst of the recession brought on by the novel coronavirus pandemic.
The AICPA’s Q3 2020 Personal Financial Satisfaction Index measured 33.1, representing a whopping 99 percent (16.5 point) increase from the previous quarter. That’s the biggest quarterly increase in the 27-year history of the PFSi, and a complete turnaround from the second quarter, when the index had its largest ever quarterly drop.
Kayly Hill is the Director of Strategic Accounts at Nava Benefits, a modern benefits brokerage on a mission to bring high-quality, affordable healthcare to all Americans. With more than two decades of experience spanning insurance and benefits consulting, Kayly is committed to helping clients improve their employees' benefits experience while managing costs.
Stacey Lowman is the head of employee well-being at Claro Wellbeing, a financial wellbeing provider that offers one-to-one coaching sessions, in-person and remote employee webinars and workshops and access to financial courses and content to support employees financial goals.
Claro is offered as an employee benefits package that provides accessible financial guidance and educational resources to help employees feel more confident and supported in their roles, boosting engagement and performance, whilst also enhancing a company's workplace benefits to help retain staff and attract first-rate talent.
Eric Ly is the Founder and CEO of KarmaCheck, a first-of-its-kind company that uses data-driven technology to bring truth, speed, and efficiency to background checks. Ly is the cofounder of LinkedIn, a social networking platform, where he served as the chief technology officer. Ly helped launch LinkedIn from a strategic perspective and assisted with the architecture and implementation of specific aspects of the networking and search algorithms. Ly even acted as the vice president of desktop, building a team of professionals to lead the desktop integrations. Ly attended Stanford University, where he earned his bachelor of science in symbolic systems, and the Massachusetts Institute of Technology (MIT), where he earned his master of science in media arts and sciences. After earning his MS, Ly returned to Stanford to pursue a Ph.D. in computer science. After co-founding LinkedIn, Ly founded Presdo, Hub, KarmaCheck, and several other companies.
The PFSi is built around various factors, including the labor market. The gains can be mainly attributed to improvements in job openings per capita and underemployment. Those had the biggest impact on increasing the overall PFSi. The biggest factor driving the quarter-over-quarter rally was a 35 percent (37 point) decrease in underemployment. A decrease in underemployment improves overall financial satisfaction in the index. While there was an improvement in underemployment in the third quarter from Q2’s record high, it’s still 117 percent above its level a year ago. For the second consecutive quarter, underemployment is still the biggest negative contributor to the average American’s personal financial satisfaction. The Q3 underemployment level reflects data measured through the middle of September.
“As Americans continue to navigate the economic impact of the COVID-19 pandemic, it is important to remember that the fundamentals of financial planning haven’t changed,” said AICPA PFS Credential Committee chair Dave Stolz in a statement Thursday. “Though the stock market’s record performance is encouraging, 2020 has served as a reminder of the volatile nature of markets. As the impact of COVID-19 continues to play out across the country, investors should weigh their risk tolerance and ensure they have ample cash on hand. Further, a tax-efficient financial plan that includes a diversified portfolio can give confidence that long-term financial goals will remain within reach through this period of extreme uncertainty.”
The coronavirus put millions out of work, prompting job openings per capita to show a record plummet earlier this year. In the third quarter, job openings started to recover, climbing 37 percent (20 points) compared to Q2. That factor is now only 10 percent below its measurement a year ago before the pandemic. The Q3 index comes from July data from the U.S. Bureau of Labor Statistics.
