How to Manage Your Lottery Winnings

The word lottery isn’t just used for games; it also refers to a number of life’s events, from the fate of a visa application to room assignments. In fact, a lot of people’s lives feel like a lottery—and that can have some serious consequences.

Lotteries are a huge business. The big prizes are enticing enough to draw in people who don’t usually gamble. And there’s something to be said for the inextricable human impulse to play the odds and hope for a win.

But states that rely on the revenue of ticket sales need to think carefully about how they market their products. Studies show that people who buy tickets tend to do so in zip codes with more low-income residents and minorities. That doesn’t make lotteries especially helpful for communities that need extra cash the most.

The idea behind state lotteries was that the money would help them avoid more onerous taxes and build up a social safety net. This arrangement worked well in the immediate post-World War II period, when states could expand their offerings without socking it to the middle and working classes.

But as the world’s longest-shot winners have demonstrated, this sort of windfall isn’t always a sure thing. Some have blown it all on cars and houses, or worse. But a handful of lucky folks have found ways to manage their new wealth. To do so, they often assemble a financial triad—a certified financial planner, an accountant, and someone else who can help them plan for the long haul.