Americans see highest level of personal financial satisfaction since 2007

By Samiha Khanna

Americans’ personal financial standing continues to rise, according to the Personal Financial Satisfaction Index (PFSi).

A third-quarter analysis released Oct. 27 reports a net index value of 19.0. This represents the highest standing for the PFSi since the first quarter of 2007, when prerecession home values and job opportunities contributed to a net value of 19.1. The third-quarter figures represent a 1.7-point increase from the previous quarter and a 3.3-point increase compared with the same period last year.

The index offers perspective at a time of political uncertainty, said Kelley Long, CPA/PFS, a member of the AICPA’s Consumer Financial Education Advocates group. It suggests that many consumers have indeed recovered their personal financial standing since the recession, she said. 

“The index gives consumers permission to feel satisfied about their situation when times are objectively good, instead of always worrying about what’s wrong,” said Long.

The PFSi is a proprietary measure of the financial well-being of the average American, assessed quarterly by the AICPA. It is calculated as the difference between two subindexes: the Personal Financial Pleasure Index and the Personal Financial Pain Index.

The Pleasure Index uses four equally weighted indicators to measure the growth of assets and opportunities: job openings; home equity; the PFS 750 Market Index, a proprietary stock market index; and the CPA Outlook Index, a measure of CPA executives’ sentiment of their companies’ economic prospects.

The Personal Financial Pain Index measures four equally weighted factors that suggest economic decline: inflation, personal taxes, underemployment, and loan delinquencies.

This quarter’s improvements in the PFSi value can be attributed largely to an increase in all four of the Pleasure Index indicators, including a 2-point gain in the PFS 750 Market Index, a 1.3-point gain in home equity, and a 0.9-point boost in the CPA Outlook Index.

The increase in home equity is the natural result of the rebound of the housing market, Long said. It means that many families may be able to refinance loans they could previously not afford.

Loan delinquencies are down 3.4 points from last quarter. However, underemployment held steady, remaining at 20% behind the average value before the recession, which continues to contribute to personal financial stress. Americans saw minimal gains in job openings per capita last quarter with a 0.3-point increase in job openings, largely in professional and business services and durable goods manufacturing.

“The PFSi shows that Americans’ financial satisfaction is back at prerecession levels, which is great news. However, the slow climb to get there has been frustrating for people who are looking for work and may still be underwater with their mortgage,” Michael Eisenberg, CPA/PFS, a member of AICPA’s National CPA Financial Literacy Commission, said in a press release. “While there have been substantial improvements in the job market, many of the industries and regions hit the hardest are not back to their 2007 levels.”

More information about the PFSi is available at

Samiha Khanna is a Durham, N.C.-based freelance writer. To comment on this article, contact editorial director Ken Tysiac


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