Winning the Lottery Isn’t all It’s Cracked up to Be – Let’s Make our Own Luck!
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As first published in Momentum
By Taz Rajan | Reading time: 4 minutes, 31 seconds | 904 words
Do you remember playing ‘If I won a million dollars I would….” with your friends when you were younger? Have you seen an announcement for a large lottery winner and come up with all the things you would do if you won? Are you like I was and never buy lottery tickets and feel like you can’t dream of winning big or making it big?
Dreams and goals are very powerful and can be a great tool for planning out our success and our lifestyles. How well do lottery winners actually fair? Well according to the National Endowment for Financial Education, 70% of lottery winners end up declaring bankruptcy within a few years. Sounds odd doesn’t it?
When things are tough financially, we believe that a windfall is the magic bullet and will cure everything. In reality, most financial strain has very little to do with money itself and has everything to do with our habits, mindset, relationship to money, how we manage, save, invest and steward our money. If we do master good money habits when we have little money, those ‘good’ money habits will only be magnified with more money.
Where did the money go?
What often happens with lottery winners is that friends, family and even strangers come forward wanting and needing financial assistance and it can be very hard to say no. There is also the issue of fraud, scams and even becoming vulnerable to theft. Finally, many lottery winners spend their winnings on addictions and other spending habits which deplete their funds very quickly.
I can speak from personal experience. I remember when my dad won the lottery in the late 80s or early 90s. It was incredible and exciting! Wow, my dad won and his picture was in the newspaper – “woo hoo we’re rich,” I thought. Well my dad is one of the most kind and generous humans I know. He of course, went ahead and had custom 22 karat pendants made for each of his sisters, sister in laws, my mom, my sisters and myself and even a few extra people. He helped people, gave money to charity and in all honesty, he had to declare bankruptcy just a few years later. Though $100,000 was a lot of money back then, it certainly was not enough to sustain that lifestyle.
How to save up a lot of money?
A real key to all of this really is our money mindset, our relationship to money and our money habits. These begin when we have no money at all, as children when we get money messages from our parents. Until we change our money mindset, habits and relationship to money, no amount of money or windfall will make a difference. One of my favourite quotes is by Jim Rohn; ‘For things to change, you have to change.’ This is really the case here with money, more money does not always mean more abundance, more savings, more happiness. If our money habits are sabotaging our success when we have little, more money only magnifies that – you don’t need to look far to see examples of this in Hollywood or even in the movie The Wolf of Wall Street. You can see positive examples too like Bill Gates and Oprah with their philanthropy.
What’s a potential solution?
Whether it’s winning the lottery or receiving a tax refund, taking some or all of your new found money and saving or investing it is a great alternative. The money has the opportunity to grow, you may be able to tax shelter the money and you can save faster for some bigger financial goals. Saving is winning because it can be a great opportunity to create a much needed emergency fund. Having an emergency fund greatly reduces stress, anxiety and financial burdens. If COVID has taught us anything, it’s that an emergency can strike anytime, is not always our fault, is often out of our control and can last much longer than we may anticipate. Having that healthy emergency fund can really help relieve that burden.
A goal without a plan is just a dream. Start planning to get out of debt, or own your own home by starting to save today. We often over estimate what we can accomplish in one year and under estimate what we can accomplish in five years. It takes time to get into debt and it will take time to get out. Sometimes, you cannot get out of debt on your own due to external triggers like disability, critical illness, death of a loved one, job loss or a pandemic. If these factors are causing you to feel completely overwhelmed by debt, reach out to the Federally Legislated debt experts in Canada – Licensed Insolvency Trustees. A free, no obligation, judgement free and personalized consultation will empower you to make the informed decision and a plan of action to tackle your debt. With debt out of your way, saving for an emergency fund, a family trip or that new car are much more attainable.
Savings made simple. Savings Add Up.
Join the Momentum Savings Challenge, an app-based rewards program for savers with small incomes. Save $40 in your first month, get a boost right away. Quit at any time, or keep going for more incentives. Winning the lottery is fun and a great way to dream, changing your money mindset, habits and relationship with money will set you up well for a life of success.