12 Ways to use your Structured Settlement Cash Wisely

If you have recently received cash for structured settlement payments or are planning on selling your structured settlement payments in the near future, you will need to make some decisions on how to use that money.

Here are 12 tips for spending that money wisely:

Don’t Blow it!

It may seem an obvious point to make but the least wise thing you can do with your structured settlement advance is to waste it all on a luxury purchase or risky venture. This is no idle warning because many people who come into money suddenly, whether through a structured settlement payout, lottery winning, inheritance, employment bonus, redundancy package or some other means, end up losing the money as quickly as they received it.

It can be tempting to start spending immediately but we recommend you run through the rest of these tips before you part with even a cent of your structured settlement check.

Discuss your Options

Chances are, the spending choices you make will have an impact on other people around you, especially your close family. There may be conflicting priorities about where the structured settlement money is best directed so make sure you take enough time to all get together and have a serious conversation about this.

You would also benefit from speaking to an independent financial advisor who will be able to use their knowledge and professional judgment to guide you in the right direction. For example, their experience with different types of investment could save you from making costly mistakes.

Talk About tax

If you don’t pay attention to the tax implications of your spending decisions, you could be in for a very unpleasant shock. Although structured settlement payments are usually exempt from tax, any profit you make from that money (e.g. returns from investing in stocks and shares) is likely to be taxable. Consult with an accountant or a tax specialist to find out the tax implications of any decisions you make. They may be able to suggest a more tax-efficient way to achieve your goals. They will also be able to ensure you are not unwittingly evading taxes, protecting you from IRS penalties.

Pay Down your Debt

Paying off debt is often one of the wisest financial decisions you can make. Servicing debt interest payments are a drain on your finances and excessive debt will also harm your credit rating. However, in some cases spending all of your structured settlement money, even to retire debt, can lead to hardship in the present.

If this is the case with you, consider paying off some of your most high interest debts (e.g. a credit card balance or pay day loan). This will reduce some of your repayments while still leaving you with the money you need in the short-term.

Set up an Emergency Fund

Every household experiences emergencies every now and then. These can be relatively minor (a car breaking down, a water leak in the house, etc.) or quite major (e.g. loss of a business, unemployment, etc.) Often this means either having to borrow money or dipping into savings. An emergency fund is a buffer that avoids both of these options. It is up to you how much your emergency fund should be but it is good practice to have at least six months’ salary set aside.

Separate this money from the rest of your finances so you are not tempted to touch it.

Downsize your car

It is tempting to use structured settlement money to buy a bigger and better car but this can put added pressure on your daily budget due to an increase in gas and maintenance costs. On the other hand, upgrading to a smaller, more fuel efficient car can save you money in the long run. Investing in an electric car can, of course, eliminate gas costs altogether.

If you do need to use gas, schedule in your refills so that you can use the cheapest filling station. Keeping a log of your journeys can help you to keep an eye on your fuel usage. Perhaps walking to the convenience store for a top up shop is an option after all!

Invest in Yourself

One way to use your structured settlement payout to improve your overall financial health is to invest in a means to increase your salary. Whether that means earning promotion or moving to another employer, paying for relevant training or certification will increase your value in the workplace. There are plenty of options you could consider. For example you could attend undergraduate or graduate school full-time, sign up for an apprenticeship scheme, take a part-time evening class, or enroll on a massive open online course (MOOC).

Invest in your Children

Many people use structured settlement cash to pay for their children’s college fees and not just because it is a loving thing to do. Without the burden of student loan debt to pay off, your children are then free to spend their hard earned cash on providing for their future. Not only will that reduce the risk of them needing to rely on your money in the future, they are also more likely to repay the favor by supporting you in your retirement.

Invest in Business

There are two ways of investing in a business: you can either start one of your own, or in a partnership with someone else, or buy shares in one or more businesses. It is important to understand that both of these options entail risk and therefore you could lose all of your structured settlement money.

On the other hand, investing in the right business at the right time can lead to amazing returns. Speak to a financial advisor and your family before deciding if investment is for you.

Increase the Value of your Home

Whether you are planning to sell in the future or pass it on as an inheritance, adding value to your home through renovation or refurbishment is a wise choice. Adding extra rooms by extending or converting a garage or basement will almost always add value while improving the aesthetics of your property or land can increase its appeal and lead to a faster sale. Keep an eye on neighborhood prices though because this will determine the maximum price you can sell for.

Make a Donation

If you believe in karma, making a donation to your favorite charity may lead to reward in the future. And if you don’t think your good deeds will be rewarded, you can still benefit from the uplifting feeling of having given back to society.

Either way, don’t forget that any donations you do make from your structured settlement payout are allowable as expenses for tax purposes.


Just because it’s foolish to blow all your structured settlement money on parties and shopping, that doesn’t mean you have to hang on to every cent. Everybody deserves some pleasure in life so whether you decide to take a short vacation with your partner or treat your family to a slap up dinner, make sure you make an occasion of your financial bonus.

If you are looking for an experienced company who can guarantee you the most money for structured settlements, talk to New Leaf on 1-800-517-7671.

Editorial Team

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