• Written By
    Rachel Christian

    Rachel Christian

    Writer & Researcher

    Rachel Christian is a Certified Educator in Personal Finance with FinCert, a division of the Institute for Financial Literacy. She is committed to promoting financial literacy and making complex financial topics accessible to readers from all walks of life.

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  • Reviewed By Roger Wohlner
  • Updated: May 8, 2023
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Putting Your Settlement Towards Education

Education is a gateway to a better life. That can mean different things to different people: For some it’s a way into a more fulfilling career path and for others it’s a way to have the financial security to have peace of mind.

However, education is expensive. The average cost of a Bachelor’s degree from a public university is around $22,000.  Still, education does pay off. On average, for every dollar someone invests in their education, they get $1.15 back. And using structured settlement payments to pay for your education means less money in student loans.

Ways to use your settlement towards education:

  1. Finishing your degree
  2. Obtaining a higher degree
  3. Selling payments for education living expenses
  4. Paying off student loans
  5. Setting up a college fund for a child
Interested in selling all or part of your structured settlement payments?

Using Your Settlement to Buy a Home

Settlements can offer a solution towards a down payment.

Living in a home you shared with a lost loved one can bring back painful memories. Tiny dents in the door frame from moving in the couch you picked out together or the empty extra sink in the bathroom each have a story. Others may have never gotten to make memories in a home of their own to start with. Buying and moving into a new place can be a great way to have a fresh start emotionally, while using the legacy the structured settlement represents to make good decisions about your future.

Owning a home is a great asset that, like a structured settlement, is with you for years. With a few noted exceptions, home values tend to rise over time. And what doesn’t change over time is the need for a place to call home. Money for a roof over your head will always be a budget item, why not make that expense an asset?

Either way, to purchase a home with a standard mortgage, called an FHA loan, you need at least 3.5% of the total amount of the loan. So for a loan the amount of the median home price in the country, $188,900, you need a down payment of $6,612. A structured settlement can provide that money, becoming a way to transition your life with respect for the future while honoring the past.

Grief is perhaps an unknown territory for you. You might feel both helpless and hopeless without a sense of a 'map' for the journey. Confusion is the hallmark of a transition. To rebuild both your inner and outer world is a major project.

Settlement payment plans are often structured to schedule large lump sums at certain times, and one could be used to put a down payment on a home. Conversely, if your settlement isn’t structured that way, you can sell future payments to get a lump sum.

Responding to a Crisis

Sometimes things just come up. Like suddenly realizing you owe the IRS much more than you expected. Or a medical condition that requires urgent and expensive treatment.  Your loved one might not be there to help, but luckily your settlement is.

Unexpected costs:

  • Losing your job
  • Medical bills
  • Auto repair
  • Back taxes
  • Home repair

Structured settlements offer financial stability in unstable times. For some, having extra money monthly from a settlement is enough to ensure those unexpected costs don’t turn into crippling debt.

For those situations where your settlement isn’t enough, or if you’re still waiting for payments to arrive, structured settlements offer flexibility because owners can sell future payments for cash right away.

Only 4 out of 10 Americans have the amount of cash on hand to handle a substantial unexpected cost.
Pew Research

Using Your Settlement to Start a Business

It’s never too late to become the person you always dreamed you could be. For many, being creative is simply part of who they are.

Living a dream that someone else believed in can be a great way to honor a legacy. Maybe they knew all your life you wanted to be your own boss, or believed that you could offer the world something really special.

Great businesses are started when someone thinks up the solution to a problem. Some of those problems are complex, like the Kitchen Aid which gave cooks more time to do other things instead of hold on the end of a mixer. Other problems are simple, like your neighborhood not having a bakery.

The average age of a first-time entrepreneur is 40. Being over 55 makes you twice as likely than those under 35 to experience high growth.
Kauffman Foundation

Successful entrepreneurs know they will have to work the hardest. But the payoff is being the master of your own professional destiny. It also takes startup capital.

While structured settlements don’t typically have that built in, it’s possible to sell a portion of your payment to get the money you need to get going.

Finding a Balance

Deciding how to use the new-found income from a settlement can be intimidating. When you add feelings of loss to the pressure of making the right decision, the weight of your decisions can seem crushing.

People tend to fall into two groups when it comes to money related to the death of a loved one. And people typically know fairly quickly which set they belong to.

One set of people find that no possible way to spend the money is good enough to honor the departed. So, they save it all, letting it pile up with no clear purpose. The other set of people find that new things are one of the few ways to sooth the pain they feel. In turn, they can spend the settlement money quickly and then rack up a serious amount of debt.

Questions for the “saver” to ask themselves:

  • What would they have wanted?
  • What did they always believe you could do?
  • What were they the most proud of you for?
  • If they could give you anything to bring you peace, what would it be?

Questions for the “spender” to ask themselves:

  • How can you ensure you have the stability they’d want for you?
  • What low-cost activities can you engage in to honor their memory?
  • How can your actions, not your money, benefit the people who remain in your life?
  • When would they think it was okay for you to feel happy again?

Whichever group you’re in and whatever path you choose, know that you shouldn’t feel guilty. Grieving is a personal experience that takes time to work through. You still have a chance to turn your pain into something beautiful.