What Should I Do With My Settlement Money?

When you’ve been injured in an accident in Massachusetts, depending on the nature of the accident and various other factors (such as whether the accident resulted from someone else’s negligence), you may be eligible to seek financial compensation for your medical bills, lost wages, and other damages.

You can often pursue the compensation you may deserve by filing an insurance claim and negotiating a settlement. However, sometimes, individuals in your circumstances are so focused on seeking the compensation they may genuinely deserve that they don’t thoroughly consider how they will manage their funds when they collect them.

When you receive a personal injury settlement, it’s wise to make informed decisions that will ensure your long-term financial stability.

In the vent funds are recovered for a permanent or catastrophic injury, your attorney will guide you and your loved ones to help ensure trusts or other methods are employed to address future healthcare and life needs. However, other circumstances may allow for some flexibility in planning. These tips will help:

Cover Your Medical Bills

The main purpose of settlement money when you’ve been injured is to compensate you for losses resulting from an injury or illness.

This often includes medical bills. If you’ve been injured because someone else was negligent, you shouldn’t have to pay for the cost of necessary medical care. This is among the main reasons you might file a claim with the insurance of the negligent party who caused your accident. Such bills are often in the form health insurance “liens”, maintained by insurers during litigation to recoup moneys paid should your attorney succeed in securing a recovery. Typically, liens are know prior to settlement, and can be negotiated and paid prior to your distribution.

Pay Off Outstanding Debts

One of the first things you should consider doing with your settlement money is paying off any outstanding debts. This includes credit card debt and any other debts you may have incurred as a result of the accident.

Paying off debts can free up your income and provide some much-needed financial relief. This is particularly true if your settlement includes compensation for lost wages because you were unable to work while recovering from your injuries.

Set Up an Emergency Fund

It’s important to have a safety net in case of unexpected expenses or emergencies. Setting up an emergency fund with a portion of your settlement money can provide you with a sense of security and financial stability if there is any money left over after you’ve paid off debts. Aim to save three to six months’ worth of living expenses in an easily accessible account.

Invest in Your Future

Consider investing a portion of your settlement money in your future. This could mean contributing to a retirement account or investing in higher education or career development.

Consider a Structured Settlement

A structured settlement is a type of financial arrangement in which the settlement is paid out over time, rather than in a lump sum. There are various reasons this may be an ideal option for you.

Structured settlements can provide a steady income stream and can help ensure the funds are used wisely over a longer period of time. Speak with your attorney to learn more about structured settlements and whether they are a good fit for your financial goals.

Seek Professional Financial Advice

Managing a large sum of money can be overwhelming, especially if you are not familiar with investing or financial planning. Consider seeking professional financial advice from a trusted expert who can help you create a long-term financial plan that aligns with your goals and values. A financial advisor can also help you maximize the return on your investment and manage your settlement money responsibly.

The Importance of Hiring an Attorney

The advice here should help you better determine how you can use the funds from a personal injury settlement responsibly. However, to optimize your usage of the compensation you receive, you must of course first secure an amount of compensation that’s appropriate given the nature and extent of your losses/damages.

This is just one reason to enlist the help of an attorney when filing a claim or lawsuit. At Swartz & Swartz, P.C., our team of Boston personal injury lawyers has the expertise necessary to pursue the full amount of compensation you may be eligible to receive. Learn more about what we can do for you by contacting us online or calling us at (617) 742-1900.

Need Help?

If you or someone you know, needs help from a lawyer, contact the law offices of Swartz & Swartz, use our live chat, or send us a message using the form below and we’ll get in touch to assess your case and how we can help.