The Personal Financial Satisfaction Index (PFSi): What your Favorite Orange County Bookkeeper Thinks You Should Know
Patty Hansen
How happy are you with your financial situation right now? In other words, do you feel personal financial pleasure or pain when it comes to your financial standing?
That is what the Personal Financial Satisfaction Index strives to measure for the typical American.
The PFSi is a quarterly economic indicator created by the American Institute of CPAs. This specific economic indicator weighs a variety of economic factors to calculate the financial standing of a typical American. These financial standings are only computed at a high level.
The main agenda of the PFSi is to calculate the difference between two component subindexes: the Personal Financial Pleasure Index and the Personal Financial Pain Index. These two subindexes are each created of four, equally weighted proprietary and public factors, which ultimately measure the growth of assets and opportunities in the case of the Pleasure Index, as well as the erosion of assets and opportunities in the case of the Pain Index.
In other words, positive scores of the PFSi indicate that Americans are feeling personal financial pleasure. Negative scores, obviously, indicate that Americans are feeling personal financial pain. It might sound like a subjective emotional measure, but it’s not at all; it’s based on government statistics as well as proprietary AICPA data.
The PFSi has been mostly increasing from the third quarter of 2011 to the fourth quarter of 2019. Since then it has dropped dramatically. With the current pandemic still in place, unemployment and other economic factors have contributed to the drop in the index. You can use the score as a measure against your own financial security and for planning purposes.
Read more about the index here: THIS LINK IS NOT AVAILABLE ANYMORE
Or reach out to your favorite Orange County Bookkeeper and we’ll be happy to answer any questions.
The Personal Financial Satisfaction Index (PFSi) Sign up for our newsletter: https://teamoneaccounting.com/
Related Posts
Monsters Under the Balance Sheet: Why This Often-Ignored Report Deserves Your Attention
When business owners review their financial reports, the Profit & Loss Statement usually gets most of the attention. It makes sense. You want to know how much revenue came in, what you spent, and whether the business made a profit. But lurking just beneath the surface is another report that tells an equally important story:…
Is Your Profit Disappearing? Finding the Financial “Vampires” Draining Your Business
Your sales are strong. Your team is busy. Revenue looks healthy. So why does it feel like there should be more money left over? Sometimes the biggest threats to profitability aren’t dramatic expenses that immediately get your attention. They’re the smaller costs and inefficiencies quietly lurking in the background, taking a little bite out of…
Small Financial Habits That Make a Big Difference by Year-End
With fall approaching, now is a good time to make sure your books are on the right track for next year’s tax filing. When January arrives, many business owners suddenly find themselves scrambling to get their finances in order. Receipts need to be tracked down, accounts need to be reconciled, outstanding invoices need attention, and…