How Should I Budget The Money Im Getting From A Car Accident?

November 24th, 2009 | by Frenday |

Im 20 years old and this will be the most money ive ever had at one time. I don’t really have that many responsabilities. Im just scarred its going to slip threw my fingers.

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  1. 3 Responses to “How Should I Budget The Money Im Getting From A Car Accident?”

  2. By aj485 on Nov 24, 2009 | Reply

    Open a savings account at an online bank that pays at least 5% and let the money sit there for a while while you decide what to do with it.
    You may want to take some of the money and spend it on something for yourself – a trip, something you’ve wanted but couldn’t afford, etc. Spending a portion of the money (say 5% or 10%) on something like this may help quell the urge to spend it all.
    Do you have any high rate debt? A good use for some of this money would be to pay off high rate debt.
    Another good use of this money would be to start an emergency fund of 3 – 6 months worth of expenses so that you won’t have to borrow if you should lose a job or have another accident.
    Are you thinking of buying a house anytime in the next few years? If so, you might want to put some of the money away for that.
    If you have earned income, you may want to put some of this money into an IRA.
    You could also invest in taxable accounts with a discount broker or low-fee mutual fund company.

  3. By Malibu Ken on Nov 24, 2009 | Reply

    The fact that you are even thinking about it is a good sign.
    You didn’t say how much, so it’s hard to give you solid advice except for you to see a financial counselor or two before you touch the cash. The visit is free, they only profit if you use their services. Try to put something away so that you can not touch it (CD’s, anything similar that has a mature date). Don’t forget taxes; again, here’s where that financial counselor will help you.
    Good luck!

  4. By CGordo on Nov 24, 2009 | Reply

    Before you get the money, you can talk to your attorney about having the money structured so you don’t get it all at one time. If you don’t plan in advance, I guarantee, you will look up in a very short time and it will be gone. If your attorney is not familiar with this concept, check with a good financial planner.
    It sounds like you might be a little scared of the responsibility. That’s okay but move past that to be responsible.
    Do you want to go to school? Plan that. Don’t blow it on things that will immediately depreciate (like a brand new car). Also lose the 10 new best friends you will immediately acquire when they find out you have come into some money.
    Good luck.

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