How Do You Manage Your Money?
All of the suggestions below can assist you in developing a strategy for safeguarding and managing your personal injury compensation.
Develop Your Budget from the Settlement
Create a budget based on your monthly costs. Before your injuries and settlement, you may not have ever developed a budget. You may believe that a budget is the last thing you require (after all, you have access to real money now). Even so, you undoubtedly still need a budget, even now, despite the fact that it may seem unnecessary.
Get Help from McKay Law on Your Planning
More than ever, after you receive your check, come back to McKay Law for continued help. We help our clients keep up with their newfound fortunes. It will be far too simple to lose track of the money that comes in and goes out if you don’t set a baseline of your income and expenses. The act of preparing a budget will assist you in developing spending discipline.
Furthermore, creating a budget allows you to separate and differentiate “needs” from “wants,” giving you a clearer sense of how much money is “leftover” to fulfill your larger, long-term goals. Examine your insurance policy. Everything from your life and health insurance to your auto insurance should be reviewed. What influence does your change in circumstances have on your insurance requirements? Do you require additional coverage? What if you had less insurance? What new assets do you need to safeguard, if any?
Drafting Your Will
Examine your will and any documents related to “estate planning.” Is it time to amend or revise your will or other trust documents? If you don’t already have a will, now is a good time to make one and start thinking about other “estate planning” issues.
Get Help from Financial Professionals
Seek expert help. You can complete all of the actions outlined above on your own, but if you’ve never dealt with a situation like this before, you may want to seek advice from one or more specialists, such as:
- A specialist in insurance.
- An attorney who specializes in estate planning.
- A tax expert (e.g., a CPA)
- CPA or tax lawyer.
Although your personal injury settlement is not taxable, any income you receive from investing your settlement money is almost certainly taxable. It’s an understatement to say that the tax system is complicated and perplexing. The best course of action is to presume that some amount of your settlement may be subject to taxes at some point in the future and to consult with a lawyer to avoid any unpleasant surprises.
- A financial consultant.
A financial advisor is a specialist who knows how money works and can assist you in making sound financial decisions. A good financial advisor will examine your current situation and present you with solutions to assist you get the most out of your personal injury settlement.
- A word of caution: not all financial advisors are the same. Some are well-educated, well-trained, and self-sufficient; others are glorified salespeople promoting a specific investment firm’s product. Before you hire a financial advisor, do your homework.
McKay Law can continue to serve as your trusted advisor and help you choose the right professionals to ensure your financial well-being.