Americans are more financially content than they've been in a decade

• The Personal Financial Satisfaction Index is near a level unseen since 2006.
• Investment gains, tight job market and low inflation are primary contributors.
• Consumers should avoid overconfidence leading to poor financial choices.

Chin up, America: You're financially happier than you've been in more than ten years.

The latest results of the American Institute of CPA's Personal Financial Satisfaction Index, released today, show that investment gains, a strong job market and low inflation have driven the good vibes to their highest level since peaking in the fourth quarter of 2006.

"People are feeling more comfortable with where they are financially," said Leonard Wright, a CPA who serves on a credentialing committee for the AICPA and helped interpret the data.

The index stood at 24.1 for the quarter ended June 30, marking the second-highest all-time reading in the 20-plus years tracked. At the end of 2006, when it hit a high-water mark, it stood at 25.1. The lowest reading was in 2011 when it hit a negative 41.35.

In simple terms, the index is a combination of two opposing groups of data: "pleasure" indicators that measure the growth of assets and opportunities, and "pain" points that measure their erosion. The latest reading showed a minor increase on the pleasure side (1.4) and a big dip on the pain side (6.2) arising from a reduction in inflationary pressures.

The AICPA's data shows that inflation ran at 1.4 percent in the second quarter. While up from 1 percent a year ago, the reading is down from 1.7 percent in the previous three months due to a price war in the wireless cell phone industry and falling prescription drug prices. The Federal Reserve's target for inflation is about 2 percent.

"I don't see heavy inflation rearing its head for a while," Wright said.

The only factor that dropped on the pleasure side was the economic outlook, which captures the expectations of CPA executives in the year ahead. Based on a survey conducted in May, those pros slightly reined in their expectations.

While the data shows that the strength of the stock market has been the biggest contributor to improvements on the pleasure side for several years, the biggest change from the previous three-month period related to the job market. Unemployment stands at 4.3 percent, down from a decade-high of 9.9 percent in 2010.

Don't pop the bubbly quite yet, however.

While feeling secure financially is a good thing, it also can cause people to make riskier decisions with their money, Wright said.

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"They need to be careful that [their confidence] doesn't cause them to spend more than they should," he said.

Specifically, Wright said, a phenomenon known as the "wealth effect" can lead to overspending. Basically, it's the idea that when people feel more secure about their wealth because of rising asset values, they spend more than they can truly afford.

Indeed, even as the AICPA index was nearing its all-time high this spring, the Federal Reserve issued new data showing that total household debt stands at $12.73 trillion. Of that, roughly $1 trillion is credit card debt, which marks the highest amount since 2008 just before the onset of the Great Recession.

Wright said that while he's seen nothing in the data suggesting bad things are ahead in the near-term, people need to remember that economic activity goes in cycles and the party will eventually come crashing to an end.

"People get excited about the returns they've seen on their investments, but that doesn't mean this is the time to take on more risk," he said. "Don't throw your money in a high-risk basket and assume it's going to turn out well."