A personal injury settlement should give you plenty of money to pay your hospital bills, support your ongoing recovery, replace your lost wages, and even compensate you for your pain and suffering along the way. But there are a few issues with this framework:

1. You won’t get your settlement right away. For starters, you’re not going to get your settlement right away. If you’re in the middle of planning legal action, it could be months or years before you reach an agreement – and then several weeks or months before you actually get your money.
2. Your expenses are already mounting. Despite the fact that you won’t get your money right away, your expenses are already beginning to accumulate. You’re likely facing medical bills and other costs in addition to your daily living expenses – and you might not have much income to pay for them.
3. There are good and bad ways to use your settlement money. When the settlement money does arrive, there are good and bad ways to use it. If you buy yourself a sports car, you won’t have the money to pay off your medical bills; this is an extreme example, but similar things have happened.

With that in mind, you’ll need to be fiscally savvy if you want to make the most of your settlement – and keep up with your expenses along the way. So how do you do it?

Start a Thorough System of Accounting

First, establish a thorough system of accounting (if you don’t already have one). Your lawyer likely has you tracking any and all expenses related to your injuries, but it will be on you to keep track of other expenses, such as your mortgage payment, grocery costs, and utility bills.

This will help you in several ways. You’ll have a better idea of how much you’re spending every month. You’ll get inspiration for ways you can cut costs and save money while you’re waiting for your settlement. And you’ll have an itemized list of bills you can work through when your settlement does arrive.

Prioritize Your Expenses

Next, prioritize your expenses. You may not have the money to stay on top of all your expenses, and some are more important than others.

• Immediate needs. You should start by taking care of your immediate needs. Your rent or mortgage payment, food, and basic utilities are of utmost importance.
• Medical expenses. Your medical expenses are important, but they can also afford to wait. Depending on your situation, your insurance company may address most of your costs; when the settlement arrives, it will reimburse them.
• Everything else. Everything else should be a secondary priority. Among these expenses, taking care of your high-interest debt should be your most important focus.

You should also take this opportunity to cut unnecessary expenses, like going out to eat or paying for an entertainment subscription. You can always reinstate them when you’re back to work, or when your settlement arrives.

Make Conservative Estimates

While planning for the future, try to estimate your income as conservatively as possible. If your lawyer set an expectation for the settlement you’re going to receive, plan on a little less. If you think you’ll be back to work in 6 months, plan on a full year. Doing so will help you prepare for the worst-case scenario, meaning you won’t be caught off-guard by an unexpected financial development.

Apply for Pre-Settlement Funding

Consider applying for pre-settlement funding. Pre-settlement funding, also called a settlement loan, legal financing, or a similar term, functions like a loan. If you’re approved, you’ll receive an amount of money based on your projected settlement; you’ll receive this in your account in a matter of days, and you can use the money however you see fit.

If you don’t win a settlement, you’ll owe nothing (as long as it’s a non-recourse loan). If you do win, you’ll owe the principal plus something extra; some funding providers charge an interest rate like with a conventional loan, but some providers these days charge a fixed fee (which is preferable).

Once you have the money, some of your financial burden will be relieved. You’ll immediately feel less pressure and will have the cash necessary to start managing your expenses more aggressively.

Spend Your Settlement Money Wisely

When the settlement money does arrive, there are several important steps you’ll need to take:

• Resist the temptation to splurge. When some plaintiffs finally get their settlement, they have the urge to celebrate. They want to take a lavish vacation or buy something expensive as a way to treat themselves. While this is certainly an occasion to celebrate, you should resist the temptation to splurge; you need your money to last as long as possible.
• Repay your pre-settlement funding debt. You’ll be responsible for repaying your settlement loan (assuming you took one). Make sure you set aside the money to cover the principal, plus the additional fee.
• Cover your medical bills and expenses. Once you’ve done that, you’ll need to go through the process of prioritizing your expenses and paying off your bills. Bit by bit, you’ll close out your debts and take care of all the expenses that accumulated while you were injured.
• Focus on other debts. If you have money left over, consider focusing on other debts – especially credit card debt. Compound interest can be a massive financial burden, so it’s important to minimize your high-interest debt as much as possible.
• Save and invest what you can. After that, you should take the remaining money and save and/or invest it. If you invest the money wisely, you may be able to grow a nest egg for yourself – or, in some cases, continue living off the settlement money for years.
• Reach out to ARCFinanciallyFit.com - ARCFinanciallyFit.com is a non-profit organization that partners with Money Management International to provide financial counseling and free budgeting help for consumers involved in personal injury lawsuits.  ARCFinanciallyFit.com is a great resource that can help consumers better plan and allocate their settlement money so they are more financially secure.

Are you having difficulty making ends meet while waiting for your personal injury settlement? Or do you just need your settlement faster? A pre-settlement loan could be exactly what you need. All we need is a few pieces of information to get started – so apply today!