How to Effectively Use Injury Settlement Money

Many people lack adequate experience on how to handle large sums of money. For example, you might struggle with using your injury settlement or award money, especially if it is a significant sum. What is more, the money might not help you recover from the effects of your injury if you use it improperly.

Below are some tips that can help you benefit from your injury award.

Opt for a Structured Settlement

In a structured settlement, you receive your award in installments instead of a lump sum. You decide, among other things, the:

• Duration of the structure
• Frequency of the payments
• Size of each settlement

Structured settlements have numerous benefits. The main one is that this ensures you don't deplete your money too fast. You will still receive future installments if you exhaust previous payments.

Take a Breath First

Take a deep breath first if you opt for a lump sum payment. Don't start to spend the money as soon as the check reflects in your bank account. An injury settlement process can have a huge toll on your body. Give yourself time to relax and recollect your thoughts, and you are likely to make better decisions.

Prioritize the Essentials

When you start to spend your money, prioritize the essentials before you go to other things. For example, you can buy a house to secure your shelter or clear all pending bills. That way, you won't struggle too much even if you use most of your settlement.

Create a Plan

Leave your money in the bank and create a plan or budget on how to spend it. A good plan can help you avoid impulse spending that might reduce your money. Below are some of the things you should consider for your plan.

Investments

Invest your settlement money if it's a significant amount. Diversify your investments to spread the risk. Both passive and active investments are viable options, depending on your investment skills and experience. For example, you can put the money in a Certificate of Deposit (CD) investment that is safe but has conservative returns if you don't have investment experience.

Debt Settlements

You can also use your settlement money to settle debts. Debt settlement is especially attractive if you have struggled to pay the debts in the past. Debt settlement also makes sense since it frees money up you can use for other things. Lastly, debt settlement also improves your credit score.

Further Education

You can also use the money to invest in yourself through further education. This option makes sense if you had wanted to enroll in education before your accident, but you didn't have the money to do so.

Involve Professionals

Consult professionals who can help you receive and use your settlement in the best way possible. A financial planner, investment advisor, and your personal injury attorney are some of the professionals you can consult. An investment advisor can help you invest your money with minimum risk. An injury attorney can help you understand and set up a structured settlement.

Plan Your Estate

Plan your estate as soon as possible once you receive your settlement check. Update your estate plans and incorporate the settlement money in them if you have an existing estate plan. A trust fund, life insurance plan, or last will and testament can help. That way, your settlement money won't go to the wrong people in case of your incapacitation or demise.

You must win the injury award before you can use it. Borbi, Clancy & Patrizi can help you hunt for evidence and prove your injury case. We can also help you plan responsible money expenditure. Contact us for a consultation on any injury case you might have.