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.
Peter Margaritis, CPA, is the director of the School of Accounting Communication Center and an instructor of professional practice at Oklahoma State University, as well as an international speaker, humorist, and the author of “Improv Is No Joke: Using Improvisation to Create Positive Results in Leadership and in Life” and “Taking The Numb Out of Numbers: Explaining and Presenting Financial Information with Confidence and Clarity.” He has a Master’s Degree in Accountancy from Case Western Reserve University and is a licensed, non-practicing, CPA in Ohio. Margaritis has worked for companies such as Price Waterhouse, Victoria's Secret Catalogue, C&S National Bank, and Ohio Dominican University, and is one of the top thought leaders at the Business Learning Institute, the learning and innovation affiliate of the Maryland Association of CPAs. He is also a member of the AICPA, the Georgia Society of CPAs, the Maryland Association of CPAs, the Oklahoma Society of CPAs, and the National Speakers Association. He is also the past chairman of the Ohio Society of CPAs Executive Board and a former delegate to the AICPA Governing Council.
Mark Neeb is CEO of ACA International, the Association of Credit and Collection Professionals.
Suresh Sambandam is the chief executive officer at KiSSFLOW, a disruptive, SaaS-based enterprise-level workflow and business process automation platform with more than 10,000 customers across 120 countries. He is an expert and renowned entrepreneur on a mission to democratize cutting-edge technologies and help enterprises leverage automation.
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.
