Getting a Lump Sum? 5 Awesome Ways to Spend Your Cash
Getting a lump sum after selling a structured settlement or annuity can give you a secure financial future — along with a lot of other fun things. While you no doubt already have some plans in mind for your money, here are some smart ways you can make the most out of your earnings when you opt for a lump sum.
Pay Off Your Debt.
We’ll start with the one that’s probably the least fun, but the most important. On average, U.S. consumers possess 3.5 credit cards, but only 34.7% of them pay their full balance every month. About 15.9% pay only the minimum required balance, which can lead to a lot of unnecessary interest charges that build up over time. Paying off your debt is the best way to keep more money in your pocket at the end of every month. And if you ever have the chance to wipe the slate clean, take it.
Make an Investment.
If you’ve got enough left over from handling your own expenses, consider letting the rest of that money work for itself. Invest in some stocks or a mutual fund to appreciate the value of your money over time, and eventually you could have quite the profit on your hands.
Make a Big Purchase.
Go ahead, you know you want to. After getting a lump sum, you might be able to afford the down payment on that house or car you’ve always wanted. The more you can pay up front, the less your mortgage or loan payments will be over time — again, letting you save money in the long run. Otherwise, an average household could wind up paying $6,658 in interest payments alone every year.
Go to School.
Either for fun or for career advancement, getting an education is the golden ticket of opportunity in this economy. Take a new course or build a new skill with your money and see where life takes you.
Managing finances can be stressful. After you’ve paid off your bills and set everything else in working order, simply give yourself the freedom to relax from the pressures of money for a while. Take a vacation or get a massage. Rest easy knowing that getting a lump sum will help you stay afloat for years to come.