- Financial planner Jovan Johnson doesn’t always advise against playing the lottery.
- If you play often, he recommends that you include it in your usual budget.
- But remember: if you don’t win, you are still responsible for your financial security.
We all dream that one day we will succeed and win the lottery.
Whenever we see a huge lottery draw on the TV screen, it can be very tempting to drop everything and go buy a ticket. We start planning how we’re going to quit our jobs and buy the mansion we’ve always wanted.
While all of these things are nice to dream about, statistics prove that our chances of winning a huge sweepstakes are extremely low. There’s nothing wrong with playing the lottery if it’s for pure fun and within your budget. But I give my clients four tips before they play the lottery.
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1. Your savings come first
Before you consider playing the lottery, make sure you’re on track to save for your financial goals and pay for all your living expenses.
For example, if you don’t have a reasonable emergency fund, it may make more sense to build it up before investing too much money in the lottery. If you consider yourself a person who often plays the lottery, it’s a good idea to add this as a budget item. Think of the money you use to play the lottery as part of your entertainment or amusement bucket.
If you are married, I recommend that you discuss the lottery with your spouse. Many states now offer easy access to online lottery gambling, allowing more money to be spent in one sitting, and the ability to play the lottery from your cell phone also contributes to the possibility of overspending. Know your limit and stick to your plan.
2. The odds are stacked against you
Your chances of winning the lottery are extremely low. For example, if you played Mega Millions at the end of July, your odds of winning the $1.28 billion jackpot would have been approximately one in 302,575,350. You’re probably more likely to be bitten by a shark than winning the jackpot.
If you think you can find a formula or magic numbers, think again: there is no model or exact solution. The fact that this latest Mega Millions draw was played multiple times before someone hit the jackpot just shows how low your chances of winning are.
3. Don’t make it a habit
You might think that a $2 lottery ticket bought every day is insignificant. However, that adds up to $730 per year, and $730 placed in an online savings account can make a difference in saving for your financial goals. Set parameters on how often you play the lottery. Don’t let big jackpots make you forget about your financial goals.
When there are major jackpots, the media can sometimes influence our decisions by making us fear missing out. However, it’s a good idea to pull yourself together and remember the bigger picture. If you usually gamble, consider having a responsible partner like a financial advisor, spouse, or friend who can make sure you stay within your means.
4. Don’t use your savings
I know the high jackpot, like the $1.2 billion draw, is very attractive. However, I strongly caution against using your savings to play the lottery. Not only are your odds of winning extremely low, but you also risk jeopardizing some of your financial goals.
One strategy to limit the amount you use to buy lottery tickets is to pool an amount with a trusted group of friends or family. In this scenario, everyone would put an equal amount into the pool which creates a lump sum payment for more tickets. This is a cheaper way to buy more tickets.
Playing the lottery can be a fun activity and a hobby when done right. However, make sure your financial life is in order before you throw away large sums in the lottery, because if you’re not the lucky winner, you need to make sure you’re still on track to achieve your goals. financial.