The Dos and Don’ts of Dealing With a Structured Settlement

Did you know that Americans make 12 impulse purchases a year on average? One impulse purchase a month might not seem like a lot but they add up, especially if they are expensive.

When you have a structured settlement, you receive money that you wouldn’t otherwise come across and might be tempted to make an impulse purchase yourself.

Don’t let this upset your financial balance! Keep reading to learn the dos and don’ts of dealing with a structured settlement.

Do Count Your Money

When dealing with a structured settlement, it’s important to count your money by reading the fine print. There might be fees and other legal information you need to know regarding your settlement.

If you sell all or part of your structured settlement, count any fees you might acquire such as interest and taxes.

Don’t Make a Large Purchase

Settlement management is made to be easier because you are paid on a regular schedule rather than a lump sum.

Yet, these payments might give you access to more money than you usually have. Don’t make a lavish purchase just because you have the money.

This is the quickest and easiest way to drain your bank account and put you in a negative situation. This tip should also be followed if you sell your settlement for a lump sum as well.

Do Make a Plan

During court, you were likely given different settlement options to choose from. Depending on how you chose to receive your money, it’s important to make a plan that correlates with your financial schedule.

Decide ahead of time what you will be using payments for. You can pay bills in advance or use the money to build an emergency fund or savings account.

Don’t Rush to Spend Your Money

Managing a settlement is not a race. Once you receive payments, spend them on the essentials like bills, food, and any debt you may have accumulated.

If you have money left over, don’t spend it all in one place. Control the impulse to buy things you don’t need without first budgeting or doing research.

Do Consider Selling

The great thing about a structured settlement is that you can sell all or some of your payments to those who buy structured settlements.

You should only sell if you need money for a large purchase or an emergency. You’ll have to present your needs before a judge and they will decide if selling your structured settlement is in your best interest.

Don’t Sell Without Researching

There are different places where selling a settlement is an option but they aren’t all legitimate. To ensure you are getting a good deal and working with a reputable company, do your research first.

Structured settlements are designed to protect you from financial instability. Selling to the wrong company can put you in the negative.

Structured Settlement Management

If you have a structured settlement, you receive periodic payments to help with financing and everyday needs.

Things do come up, however, that might force you to consider selling your settlement. Whatever you decide to do, use this guide for tips.

The dos and don’ts of structured settlement management apply to most situations. For more advice on personal finance, check out the other posts on our blog.