No matter the subject of your lawsuit, there are a lot of emotions around when it finally concludes. If you’ve recently prevailed in a lawsuit with financial damages, you might feel as though one painful chapter of your life has closed.
And it’s certainly true that you need to approach this as though a new chapter just began. After all, with a significant windfall you need to think differently about your financial plan in the short and long term.
One of the biggest challenges for many people who receive a lump sum after a big lawsuit is figuring out how to handle it. The sudden nature of this influx of money can lead to some bad decisions or just general confusion over the best way to handle new financial footing. If you prevailed in your lawsuit and feel like you’re getting an opportunity to start over, it’s best to treat your new financial situation in that way.
Some of the most common mistakes people make with a new influx from a lawsuit include:
- Giving away too much money, meaning that you don’t have access to necessary funds in the future. If part of your lawsuit, for example, was for future medical payments or treatments for an injury, don’t shortchange yourself.
- Excessive spending on things you don’t really need. If you have big debts you can pay off or an immediate need like housing, consider directing your buying power there.
- Lawsuits. Even though you just got out of one, the perception of sudden wealth can make you a personal target for lawsuits.
- Poor investing. Work with a professional to learn more about market conditions and what changes, if any, should impact your investment strategy.
One of the first things you can do is consult with an experienced and qualified financial expert to create a plan in line with your needs.