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.
The service reminded taxpayers they will need to resume paying their taxes on July 15, but the AICPA is asking for further relief, as an inspector general report sheds light on the unprecedented filing season.
The Institute of Internal Auditors and the International Federation of Accountants are calling on audit committees to be vigilant about risk management, performance, controls and processes during the COVID-19 pandemic.
Nancy Ekrem has been a principal of the firm DME CPA Group PC since 1991 where she currently serves as Managing Director. DME is located just north of Seattle and services business and individuals throughout the region. Her main focus is serving clients in the areas of Estate Planning, Income Tax Planning, Business Planning, and compliance with Generally Accepted Accounting Principles (GAAP). Innovation and growth are everywhere in business and life. Nancy loves digging into an opportunity and finding an innovative way to do things. Nancy attained her CPA certificate in 1982, and has spent most of her career in public accounting. She has been with the firm since 1985. Nancy is a graduate with a BS in Business Administration from Seattle University (1981) - (Go Redhawks), a member of the Washington State Society of CPAs and the American Institute of CPAs. Currently a member of the Board of Directors of Camp Fire Snohomish Council, the Board of Directors of Greater Edmonds Chamber of Commerce where she serves as Chair, Economic Alliance Snohomish County where she serves as Treasurer, she has spent much of her time serving on various committees and boards throughout the region that emphasize business, arts, and youth. She lives in Seattle with her husband Vance. They are the parents of adult children and have twin grandsons. (Being a Grand is Grand!) They enjoy traveling, hanging out with friends, and hosting "family" dinners. One of Nancy's favorite activities is working with teenagers.
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.
