5 Future-Minded Ways to Use Your Structured Settlement Payments

Woman checking her mailbox

If you have a structured settlement and are receiving regular payments, you may wonder what the smartest way to use your funding is. When you’re given a large amount of money, you might be tempted to spend it on flashy clothes, pricey meals out, and other expensive items that fall more into the “want” category than the “need” category.  


There’s certainly nothing wrong with buying things just because you want them—but in most cases, those items’ value can depreciate steeply over time.  


If you want to make your structured settlement payments work for you and your loved ones in the long run—especially if you have a fixed number of payments, or if your payments are life-contingent—it may be wiser to find ways to use your funding that add value to your overall net worth! 


Here are some common ways that people use their structured settlement funds to build a better financial future for themselves.  


1.  Make a down payment on a house


A family of four stands in front of a house with a "sold" sign

Because residential real estate tends to rise in value over time, buying a house is often cited as one of the best long-term investments one could make.  


If you’re in the market to buy a house, you have likely heard that the amount of money you put down up front is a hugely influential part of your purchase. Your down payment can affect what kind of mortgage you’re able to secure, how much money your lender can give you, and the terms of the loan—not to mention the size of your monthly payments. 


Most experts recommend that you put down 20% of the house’s purchase price, but according to research from the National Association of Realtors, the median percentage of down payments made in the US in 2021 was 12% of the purchase price.  


Although making a smaller down payment may seem appealing if you’re eager to buy soon, putting such a small amount down can cost you in interest and fees from your mortgage over time. Additionally, lenders may be less inclined to offer favorable interest rates to people with a higher loan-to-value ratio because it implies an increase in risk. On the other hand, making a larger down payment can deplete your savings in the shorter term, leaving you with less of a financial cushion to depend on if something goes wrong.  


Depending on your financial situation, using your structured settlement funds to make a larger down payment on a home could be a great way to keep your mortgage rates and fees down. Keeping your fees and interest down while your property’s value grows could lead to a bigger payout when or if you decide to sell down the line! 


2.  Complete a home renovation 


As noted above, real estate can be a great long-term investment—but it’s not necessarily a good investment if you’re looking to build your wealth in the short term. 


If you already own a home, however, you could use your structured settlement funding to boost the value of your property more quickly than if you were to wait for your home to appreciate value over time. There’s a reason “flipping” homes has become so popular; it’s a great way to add a lot of value to a home in a short amount of time. 


If you’re interested in learning about which desirable home renovations are likely to add value to your property, check out our blog post about that here


3.  Invest in your education – or your loved ones’



A woman in a cap and gown holding a diploma

One part of the value of pursuing a higher level of education is that it can boost your career and increase your earning potential. In fact, over a lifetime, the average college graduate makes $570,000 more than the average person with only a high school diploma.  


But the costliness of tuition combined with expensive student loan debt causes many people to question whether a college degree is actually worth it! 


If you have enough cash on hand, however, that can hugely offset (if not totally eliminate) the long-term costs of higher education incurred from taking out student loans, meaning you get to keep more of your post-degree earnings.  


You may already have a degree, or you otherwise aren’t interested in pursuing an education—so why not use your structured settlement payments to set up a college fund for a loved one? Giving someone the gift of an education can be incredibly meaningful, and it allows someone you love to access a better future with less financial burden.


4.  Pay off your debts


Medical bills, student loans, credit card debt—all of these can have a huge impact on our finances and our ability to save for the future. But if you have a structured settlement, you can use your funds to pay off your debts and get a clean slate!  


Imagine how much money you could save if you didn’t have to pay off your debts (especially the high-interest ones) over the course of years or even decades. That alone makes the case for paying off your debt with your structured settlement funds.  


By the way, if you’re interested in seeing just how long it will take you to pay back your creditors and how much you’ll save in interest, check out our free Debt Repayment Calculator tool. 


5.  Start your own business 


A woman and a man wearing aprons and standing next to a sign saying "we are open"

Using your own money to kick-start raising capital for a small business is an excellent way to show potential investors, business partners, and bankers that you are committed and willing to take a chance on yourself.  


Starting a business can be financially risky, but you might feel like doing what you love and what you’re good at is worth the risk! If that’s the case, you could use your structured settlement payments to be the first investor in your own enterprise. If your business grows to be successful, then your investment will have paid off well.  


Of course, if your business fails, you will likely lose your money—so it’s important to be thorough and do a lot of research on what it takes to grow a sustainable business before making any big decisions. You may want, for example, to speak to other business owners in your field, do market research to understand needs in your area, and meet with a financial advisor to determine how much you can afford to put into your business. 


But what if I need more cash?


Some of these options may require you to have more cash on hand than you have available, even with your regular structured settlement payments. To help, JG Wentworth can purchase part or all of your future structured settlement payments in exchange for a lump sum. We’ll always give you the best price for your payments, guaranteed.*


To find out how JG can help you reach your goals, call (877) 227-4713 today! 


Sources Cited


  1. Probasco, J. (2022, March 26). All the pros and cons of investing in a home. Investopedia. Retrieved from https://www.investopedia.com/articles/mortgages-real-estate/08/home-ownership.asp#:~:text=If%20you%20need%20a%20home,your%20investment%20due%20to%20appreciation
  2. 2021 home buyers and sellers generational trends report. National Association of REALTORS. (n.d.). Retrieved from https://cdn.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf 
  3. Kearns, D. (2022, March 8). How much money do I need to put down on a mortgage? Investopedia. Retrieved from https://www.investopedia.com/mortgage/mortgage-guide/down-payment/ 
  4. Currier, E. (2018, January 26). How generation X could change the American Dream. The Pew Charitable Trusts. Retrieved from https://www.pewtrusts.org/en/trend/archive/winter-2018/how-generation-x-could-change-the-american-dream 

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