If you’re feeling optimistic about your money situation lately, you’re not alone. The latest data from the American Institute of CPAs (AICPA) Personal Financial Satisfaction (PFS) Index shows that Americans are riding high when it comes to personal financial satisfaction; they’re more optimistic than they’ve been since the end of 2006.
This 10-year high is the result of three things, says the AICPA. They are: the PFS 750 Market Index’s record high, more job openings per capita, and a decrease in inflation. But David Stolz, a CPA and a member of the AICPA PFS committee, says people ought to be wary of letting an optimistic outlook cloud their thinking. “Americans shouldn’t let their present situation allow them to drift from their plan of reducing debt and adding to their savings. It’s always wise to save some acorns in the summer, because we know eventually winter is coming.”
Optimism is tinged with caution
Although job openings are higher, they are mostly in lower-paying sectors, and hiring has been weak in the tech, trade, transportation and financial fields. The Federal Reserve says some employers are having a difficult time filling jobs with skilled workers, as the labor market tightens.
And interest rates will likely go up, warns Robert Westley, another CPA and member of the AICPA PFS committee. “Consumers should keep in mind that the Fed will likely continue to boost interest rates, making it more expensive for banks and ultimately, the consumer to borrow money.”
Paying down debt is always a good idea
Westley advises folks to pay down credit cards, especially if they are high-interest cards, as well as any other loans they may have that carry high interest rates. “Any future interest rate increase will result in higher monthly payments and therefore less disposable income and less financial satisfaction.”
Transferring debt to a lower-interest credit card is another option, or even better, opening up a 0% APR balance transfer credit card account and putting high-interest balances on that, until they are completely paid off. Cardholders can save money, pay off debt more quickly, and even earn rewards when they open up a new credit account with a promotional offer that lets them transfer a balance interest-free for up to a year.