‘I Got $300,000 in a Personal Injury Settlement. What Do I Do With It?’

MY TWO CENTS APR. 27, 2023 By Charlotte Cowles, the Cut’s financial-advice columnist

About three years ago, I was in a car accident. It was 100 percent the other driver’s fault (he had been drinking), and it left me with multiple injuries. Basically, I had to learn how to walk again, and I will probably have screws in my leg for the rest of my life. I was in school for nursing at the time and I had to take medical leave. I couldn’t work or even shower on my own. I moved back in with my mom while I did physical therapy and recovered.

While my life will never be quite the same, I recently won a personal injury settlement from the accident that awarded me more than $300,000 after attorney’s fees. This is a ton of money, more than anyone in my family has ever seen. I’m overwhelmed by it and I don’t know where to start. I want to give some of it to my mom, because she took care of me and housed me while I got back on my feet (literally).

But I also want to be careful. I know that a lot of people mismanage large amounts like this, and I don’t want to be one of them. I’m now back in nursing school and set to graduate next year, but I’m still living with my mom. How much should I give to her? Should I use the rest to pay off my student loans? Should I invest it? Should I save it? Should I use it for a down payment on a home? My lawyer told me to hire a financial adviser, but I’m not even sure how to find one. What do I do?

First of all, I’m so sorry you went through this hellish experience. No amount of money can make up for a painful accident and difficult recovery, not to mention the life stuff that got sidelined because of it. But this settlement can provide you with some comfort and security going forward, especially if you manage it well. I hope that things only get better from here.

I agree that sitting down with a certified financial planner is a smart idea. No one — including me — can or should give you specific advice without reviewing the details of your life. I’ll give you some pointers on finding a professional you can trust, and then cover the topics that you can discuss with them.

But first, as you mentioned, there’s a lot of bad advice out there about how to handle a big windfall like this. A quick Google turned up a bunch of stuff about annuities — don’t fall for it! You might also have people coming out of the woodwork to ask you to invest in their business or tell you to buy a house or a car or a pony or cryptocurrency. Practice some version of this statement: “Thank you. I’d actually rather talk about something else. This has been a lot to deal with.” And then either give them a nice smile or a hard stare.

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