In response to Jenny’s question, “What do you think people who win the lottery should do with the money to reduce the possibility of ending up in debt?”

I actually have a friend who’s mother won a million dollars thanks to the lottery and she spent it in the snap of a finger and I can guarantee she is in debt, although she doesn’t work and I don’t think her partners would be happy if they were the only one’s providing income. Her one daughter that is in college has had to take out student loans in order to pay for it and the daughter will be the one who has to pay it all back. Although I am sure this will be a lot easier said than done here is what I think should be done with significant lottery winnings…

First of all any debt that already existed prior to winning the lottery should be paid off, including current bills that could be paid off and could be paid in advance. The next thing to do with left over money would be to start a college fund savings account for any kids that the winner has or may plan to have in the future. Then make home improvements (if you have one…or put money way towards a future home) such as windows, roof, painting, additions, etc. After all this if there is any money left take a small amount and go on the shopping spree you always dreamed of, donate to a charity you love, and the rest of it put it in a savings account so it will collect interest and DON’T touch it unless there is an emergency.

Question:

Do you think people who win the lottery for say a million dollars realize because of what gets taken out in taxes they don’t actually get a million dollars, they get a significant amount less??