How Can I Wisely Invest My Settlement Money?

I’m 19 years old and recently received a $100,000 settlement from an accident, but after fees, I’ll have $60,000 left. As someone who tends to spend impulsively on things like video games, and who has never handled this much money, I’m worried I’ll squander it. My parents tell me that this money could set me up for the future if used wisely, but I’m unsure how to proceed. How can I invest this money in a way that supports my future and helps me avoid giving in to temptation?

Andy W.

Your story and your concerns touch on something profoundly human: the relationship we have with money, how it can bring both opportunity and anxiety, and the ways we navigate these complex feelings. Your openness about your habits and fears shows a level of self-awareness that’s key to making wise financial decisions.

First and foremost, I want to commend you on seeking guidance. Money is often so much more than currency; it’s tied to our dreams, our fears, and our sense of security. Here are some tailored steps that may help you approach this new financial chapter with confidence and wisdom.

1. Acknowledge Your Feelings: Recognize that it’s completely normal to feel overwhelmed and uncertain. Money is an emotional matter, especially when it’s tied to something as significant as an accident and an unexpected windfall.

2. Seek Professional Guidance: Since this sum of money is life-changing for you, it may be wise to consult a financial planner or advisor. They can help you create a structured plan that aligns with your long-term goals and needs. Look for a certified professional who has your best interests at heart.

3. Consider Your Long-Term Goals: Are you planning on further education? Want to move out and get your own place? Invest in a business? These goals will guide how you invest and save this money. Reflecting on your future can turn this sum into a tool that builds the life you desire.

4. Create a Budget: Setting a clear budget can help you understand where your money is going and what you can afford. Include room for some leisure spending, so you don’t feel deprived. Balance is key.

5. Invest in Yourself: Whether it’s pursuing education, training, or personal development, consider ways you might invest in yourself. The right investment can pay dividends throughout your life.

6. Set Up Safeguards: Since you’ve expressed concern about temptation, consider setting up accounts or investments that are less accessible. A professional can guide you toward options that allow growth without easy access for impulsive spending.

7. Engage Your Parents’ Wisdom: It sounds like both your mother and father care deeply for your well-being. Their life experience and understanding of who you are can be a valuable resource.

I’ll leave you with a personal reflection. The journey to financial wellness is often a winding one, full of learning and growth. Trust in your ability to navigate this, seek guidance from those who know and care for you, and remember that this money, while significant, doesn’t define you or your future. It’s a tool, and with thoughtful use, it can indeed set you up beautifully.

Warm regards,

Lily Kensington


  • Lily Kensington

    Lily Kensington is a financial psychologist, a proud member of the ANZA Psychological Society, and a passionate advocate for financial wellness. A former high school English teacher and psychology graduate, Lily brings a unique perspective to her writing that blends the intricacies of psychology with the world of finance.Over the past decade, Lily has dedicated her life to helping individuals and couples navigate their emotional relationship with money. Her empathetic and intuitive approach, honed through her counselling practice, breaks down complex financial concepts into relatable and practical advice. Lily's writing often reflects her personal journey as a single mother, providing valuable insights and support for fellow single parents navigating the world of personal finance.In addition to her numerous contributions to wellness and personal development blogs, Lily is the author of the book "The Heart of Money: A Psychological Guide to Financial Wellness."In front of the camera or behind the pen, Lily's mission remains the same: to help others achieve financial peace by understanding the psychology of money.

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