There’s an endless list of uses for the biggest jackpot winnings in lottery history and different ways you can use it, from buying lavish items to making investments. Know what you can do with your lottery winnings and how you can use it wisely in this overview.
How do lottery winners manage their money?
When you’re met with sudden wealth, especially from the lottery, take a moment before doing anything. Ignore the urge to spend everything at once. While it might be tempting, you can do that after you’ve covered all your bases and ensured your wealth isn’t short-lived. Follow our advice on procedures if you win the lottery below:
Find support from a financial advisor
If you win the lottery, you have two options for receiving your prize—a lump sum or annuity payments. A lump sum will pay out immediately, but annuity payments will pay out in intervals over a set time. Here’s when it’d be wise to hire a financial advisor. They can tell you whichever is best for your situation and advise accordingly.
Afterwards, they can advise you on the different risks you may encounter and help you create long-term plans like retirement funds or starting a business.
Financial advisors will also assist you in your tax obligations, letting you know how much will be deducted from your total winnings and how much you can expect to receive.
Track your spending
You can improve your finances by tracking how much you spend every month. The first step towards having better financial habits is becoming aware of your spending habits and cost of living.
You may be tempted to forgo this, considering you’ve just won millions, maybe even billions, but having a monthly tracker of your expenses can help you figure out how much you’re spending and see where you can cut back.
Create and follow a realistic budget plan
Following up on creating long-term plans and money management awareness, budgeting is where you start executing your plan. Take what you learned from your financial advisor and your spending habits and create a budget plan that you can follow every month.
Create and adjust a budgeting plan that fits your lifestyle and spending habits while still ensuring you’re not burning through your winnings.
Start an investment strategy
Investing as soon as you can is one of the best and smartest uses for your lottery winnings. A good investment strategy can mean generating income for you and your family to the point where you can be financially set for the rest of your life.
Investments can have varying risk levels, from stocks to bonds to mutual funds. If you’re new to this world, you can seek help from investment advisors who can give you the best tips on the best investment options for you.
Make an emergency fund
You never hope to encounter one, but it’s always best to be prepared in case of emergencies. Setting some money aside for unforeseen circumstances would be the best thing you can do for situations like those. Not only will you still be financially protected during rainy days, but you’ll also be granted peace of mind knowing you’ve planned.
How do people spend their lottery winnings?
Let’s see how previous lottery winners have spent their winnings at the table below. It depicts a survey of 538 total respondents in Japan. As you can see, all of their answers can be boiled down to investment strategies, purchases to improve their lifestyle, and things people need for their daily necessities.
What to use if you win the lottery
| Spending decision | Number of respondents | Percentage of respondents |
| Saving | 141 respondents | 45.6% |
| Renovation or purchase of land/housing | 57 respondents | 18.4% |
| Car purchase | 50 respondents | 16.2% |
| Trip | 44 respondents | 14.2% |
| Family services and filial piety | 44 respondents | 14.2% |
| Repayment of debt | 39 respondents | 12.6% |
| Investment | 35 respondents | 11.3% |
| Child education and child support | 31 respondents | 10.0% |
| Enrichment of hobbies | 25 respondents | 8.1% |
| Social contributions such as donations | 10 respondents | 3.2% |
| Funding for work/business | 10 respondents | 3.2% |
| Lessons and studies | 6 respondents | 1.9% |
| Purchasing branded goods | 3 respondents | 1.0% |
| Marriage fund | 3 respondents | 1.0% |
| Beauty (aesthetics, cosmetics, etc.) | 1 respondent | 0.3% |
| Retire | 1 respondent | 0.3% |
| Move abroad | 1 respondent | 0.3% |
| Others | 29 respondents | 9.4% |
| No answer | 8 respondents | 2.6% |
Lottery: High winnings, clever usages
As you can see from the table above, nearly half of the 538 respondents chose to keep their winnings in their savings at 45.6%. This means they wanted to preserve the longevity of their winnings by keeping them in personal savings accounts and not blowing them on huge unnecessary spending.
The top two and three results are for housing and car purchasing purposes with 18.4% and 16.2% respondents, respectively. In most cases, these two are considered to be lifestyle improvements. It’s only natural for people to try to improve their quality of life through their lottery winnings as long as it’s well within their budget.
Things not to do with lottery winnings
Winning the lottery can instantly change your life, but having that kind of money requires a lot of responsibility. Far too often, lottery winners misuse their winnings and fall into the trap of overspending and ending up in debt.
If you win the lottery, make better financial decisions and avoid these common mistakes:
Don’t seek out the high-roller lifestyle
As tempting as it is to roll up to a gaming floor and begin gambling like you’re the casino’s top high roller, avoid doing this. Going from living an ordinary life to being able to spend hundreds, even thousands, at the casino is not good in the long run, considering the intoxicating nature of betting and high rolling.
Those already familiar with casinos know that this can lead down a dangerous road of unhealthy and irresponsible gambling habits.
Instead, set limits for yourself. Gambling isn’t an inherently bad hobby just as long as you practise good habits and know how to pace yourself to minimise losses.
Don’t give everything to everyone
Everyone likes charitable people, but even this has its disadvantages and should come in moderation. You can still be a charitable person without being irresponsible with your money. If you put everyone else above on your list of priorities, you run the risk of people taking advantage of you.
You don’t have to be stingy with your money, and you’re more than welcome to share what you have with others, but remember to set aside money for yourself. Don’t go overboard with the gift-giving.
Don’t overestimate your newfound wealth
One common thing among lottery winners is that they immediately jump the gun and quit their jobs because of their newfound wealth. Don’t overestimate your winnings. No matter how much you’ve won, it’s still a finite amount, and you’ll eventually find yourself at the bottom of the barrel and an empty vault. This is why managing your money and following a budget plan is essential.
On that note, don’t remain stagnant. Find ways to cultivate your wealth so you can maintain it. A few ways you can do this is by investing in stocks or starting your own business.
Manage your lottery winnings wisely!
Winning the lottery can be tricky, but when you do, you’ll need to make a plan for yourself. With a bit of carefully thought-out planning, you can use your lottery winnings to create a lasting legacy for yourself and those around you.
Through investments, charitable contributions, or even something as simple as treating yourself and your loved ones, there are plenty of uses for lottery winnings that benefit you beyond your expectations.
Whatever you decide to do, ensure that you’ve handled everything with thought and care. Now, learn how to win the lotto jackpot and try your luck in the lottery! Buy your ticket now and see how far your winnings can take you at XO Lotto.
FAQ Frequently Asked Questions
What should I do as soon as I win the lottery?
First, stay calm. Emotions run high at this point, but the first thing you should do is call a lawyer who can help you handle everything and claim your prize.
What to do if you win the lottery?
Decide what you want to do with it. It’s helpful to hire a financial advisor to help you plan a budget for that kind of money. When you hit the lottery high winning, clever usage of it includes investing it and setting aside for your savings.
How will my taxes be affected by winning the lottery?
Your lottery winnings are taxable, so you won’t receive the full amount. In some cases, the deductions can go up to 35%.
