What To Do With Your Colorado Personal Injury Settlement
Receiving a Colorado personal injury settlement can feel like winning the lottery. It is an exciting vindication and the culmination of many months of effort. While it can be tempting to go on a shopping spree and spend it all, it’s imperative to take a deep breath and focus on your needs before you indulge your desires.
One of the first things to sort out are the taxes or bills that need to be paid. Fortunately, personal injury settlements are non-taxable. However, you are still liable for your legal and medical bills. Pay these right away to minimize your long-term interest obligation.
After you pay the bills, it is essential to set aside money to cover long-term medical bills and to offset reduced income that long-term injuries or disability can cause. As a general rule, it is best to aim high with your forecast and set aside more than you think you will require.
After this, turn to your overall debt. Pay down (or better, pay off) credit cards, mortgages, and other expenses. This will reduce your monthly financial burden and put you in a stronger financial position for the future.
You should also set aside an emergency fund. It is likely you have depleted savings, and you should rebuild your emergency fund. You should set aside enough money in the bank to cover 6-8 months of expenses.
We also recommend meeting with an accountant and a financial advisor. Use your settlement to maximize retirement contributions and strengthen your investment portfolio. Doing so as soon as possible can create a strong safety net for your long-term financial goals.
Once you have taken care of all this, we recommend taking a look at your career and professional goals. You can use your Colorado personal injury settlement to learn new skills, pursue a new career, open your own business, and more. When you are recovering from a personal injury accident, this can help motivate you to move forward in new and positive directions.
Finally, give yourself small rewards with what’s leftover. Enjoy the vacation, buy new clothes, or simply enjoy a night out to celebrate with your spouse.
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