What else could you do with the money?
Alternatives to the Lottery
by Lee Doppelt
Rational Financial Behavior
How to Waste Money
Are you a closet lottery player? There's no need to hang your head in shame. If you regularly play your state lottery, you are not alone. Forty-three states now have lotteries; revenue from these lotteries has been successful in funding government programs, including education. There seems to be a bit of irony in this idea! A CNN report (5/17/13) states that the low cost of a lottery ticket, often only $1, is what seduces people to "invest" in a lottery ticket. Sadly, the people who truly cannot afford to play any of the lottery games are the very people who are attracted to it.
A report in BusinessInsider.com commented on a PBS study stating that households with annual incomes of less than $13,000 make up nine percent of state income on lottery tickets. And Reader's Digest reported in January 2014 that 70% of the winners of games with the really large payouts lost all that money within five years. Fox News (11/28/12) interviewed a winner of $550 million dollars from the Powerball Game. This person confessed that if you don't have tremendous discipline with lottery winnings, you will go broke.
Maybe you justify playing the lottery, because you only play $1 weekly, or you play larger amounts, but not very often. Well, listen up! Financial author David Bach called it the "latte factor." Banks call the concept "compounding." That $3 coffee doesn't seem like much of expenditure when enjoyed as an occasional indulgence, but stop at the coffee shop or fast food drive-up line every day and it really does add up. That $3 daily turns into over $1000 annually. Oh, the things you could do with that money!
Alternative Uses for Your Money Instead of the Lottery
Granted, interest rates are lower now than they have been in a very long time. But, the few saved pennies here and there really do add up. Your local credit union may offer higher interest rates than your bank or savings and loan. Make some calls to inquire about rates, and use the same discipline you used to stand in line at the grocery each Saturday night to buy a lotto ticket to instead put money into your new account.
- Reduce your debt.
It may only be a few dollars each week, but by adding it to your monthly payment you'll earn a good return on your money.
- Increase your child's allowance.
Teach your child about saving money. Depending on their age, they may have something that they would like to buy. Help them budget and plan so they can purchase their desired item. This is a much better investment than playing the lottery, with far greater odds of coming out ahead in both the short and long term.
- Try a new food.
Make the commitment to buy one fruit or vegetable that you have never tried. Pomegranates, though a bit of a challenge to eat, are loaded with valuable vitamins and minerals. Edamame makes a great addition to any meal, but also is a yummy snack item. Buy some dried fruits and nuts and seeds and create your own trail mix to pack in your child's school lunch box or for you to enjoy at your job.
- Fix something broken at home.
Maybe you no longer notice the burned out light bulb in the garage or the torn window shade. Visit your home improvement center or hardware store. Walk up and down each and every aisle and start making a list. Quite often, simple home repairs cost very little money. Think how satisfied you will feel when you finally get something fixed.
- Plant something edible or ornamental.
So, maybe you don't have any room in the yard for a real garden. It's amazing what you can grow on the edge of the lawn or even in large pots. A rooftop with some large pots to grow tomatoes can help supply your family with one of their favorite and versatile foods. Herbs require very little space and are great in salads and cooked meals.
Are you heading for debt trouble? This simple checklist can help you.
- Give a teacher a gift.
Your child's teacher works harder than you might imagine, putting in endless evening and weekend hours to plan lessons and grade papers. They will appreciate the surprise of an unexpected gift. You don't have to spend much money to make your child's teacher smile.
Take the Next Step
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