The present study aims to bring conclusive findings on how an individual’s personal finance contributes to his/her subjective well-being. By following Amartya Sen’s Capability approach, the present study created a model and analysed the influence of personal finance on the subjective well-being of U.S. adults through three distinct dimensions of personal finance: objective financial well-being, subjective financial well-being and financial capability. The relationship has been analysed by taking 4705 U.S. adults data from the 2016 National Financial Well-Being Survey (NFWBS) conducted by the Consumer Financial Protection Bureau (CFPB). Structural equation modelling was used to analyse the relationships. The results reveal that subjective financial well-being significantly contributes to subjective well-being, whereas objective financial well-being does not. However, it is found that objective financial well-being has an indirect significant positive effect on subjective well-being through subjective financial well-being (full mediation). Further, the study revealed that financial capability has a positive impact on objective financial well-being, subjective financial well-being, and subjective well-being. A serial mediating relationship has been found between financial capability and subjective well-being through objective financial well-being and subjective financial well-being.
