8 Tips to Manage Your Money after a Settlement

Taking a case to court can be an emotional rollercoaster — one that you may have been riding for years after an injury. When the dust finally settles, you hope to find yourself on the winning side. If you do, you may be entitled to a cash settlement. But taking care of everything after your victory isn’t as easy as some people think. Here are eight tips for managing your money after a settlement.

1. Meet with a tax expert. Depends on your specific case, you may have to pay taxes on your settlement. Meet with an accountant or other tax expert to understand what you may owe in taxes.
2. Find a good financial advisor. Your goals may vary depending on your case and the amount of your settlement, but most people aren’t used to managing a lump sum of money. Find a professional financial advisor or wealth manager. You need to make short-term plans — such as paying off credit cards you used while you weren’t working — and long-term plans — such as planning for retirement. This isn’t the time to go it alone.
3. Set boundaries with loved ones. If you receive a settlement, family and friends will sometimes expect a piece of that pie. They may see your settlement amount, but they might not see all the bills and other stresses caused by your case. Be prepared for people to ask for your money, and decide ahead of time what your boundaries will be. Many financial advisors recommend not giving or loaning money for at least a year after any type of lump sum award, whether it’s a settlement or an inheritance. The money you received in your settlement is there to take care of you.
4. Pay your bills. If you’ve been physically hurt, odds are you have medical bills, and you may have more to come. Your attorney will help you navigate some of this process to make sure your medical providers are paid. Take care of your debt first to ease your mind.
5. Set aside savings. Set aside some of your money into savings. If your case involved an injury, you may also need money for future medical expenses.
6. Consider job training. If you were hurt or disabled, you may need to consider changing careers. Consider using part of your settlement to further your education.
7. Modify your home if necessary. If you have suffered injuries that affect your mobility, evaluate whether your home needs modifications that could improve your quality of life. Do you need any doorways widened to make room for a wheelchair? Do your cabinets or faucets need modified handles?
8. If you are working, keep working. Even if you are awarded a large sum, keep in mind that the amount you receive in the end will be less because of bills, fees and possibly taxes. Don’t give up your job believing you’re set for life.

The attorneys at Laird Hammons Laird are here to guide you through the legal system, and we want what’s best for you. Contact us today if you’ve been injured. We know what it takes to win.

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