A COUPLE had hit a stroke of luck, scoring $1 million from a scratch-off lottery ticket they picked up on a whim.
The lucky pair turned to money experts for advice, who warned them that a single move would get them into deep financial trouble.
A couple from Chicago scored $1 million from the lottery, receiving financial advice from Dave Ramsey[/caption]
The couple scored big on a scratch-off lottery ticket from their local gas station[/caption]
In a recent episode of The Ramsey Show, a woman named Sarah from Chicago, Illinois, called in seeking guidance on how she and her husband should approach their newfound wealth.
She explained that a few weeks prior, her husband bought a random scratch-off lottery ticket from a local gas station, racing home in excitement and bewilderment when he saw it was a $1 million winner.
The couple agreed to take the lump sum option with a one-time $600,000 payment, which Sarah estimated would drop to a little over $400,000 once taxes were withheld.
Sarah explained that she and her husband had previously been living paycheck to paycheck on a combined salary of under $100,000 and were unsure of how to manage their prize money without blowing through it.
Dave Ramsey shared a practical approach that the couple should take, starting with hiring a tax professional to help determine the exact state taxes and federal taxes that they would owe on their lottery winnings.
“We don’t research numbers this big. We don’t research information on the internet,” said Ramsey, warning Sarah that, when it comes to lottery money, the best source of information is professionals.
He said it was worth spending $500 to $1,000 on advice from a tax professional because information online or from state bureaucrats who hand out lottery proceeds was not as reliable.
He also noted that their winnings were likely to come out to around $500,000 after taxes were withheld.
Ramsey asked the woman what she and her husband planned to do with the cash that was leftover after taxes, with Sarah sharing that they intended to pay off the $100,000 or so they owed on their home as well as their $23,000 credit card debt.
The caller also shared that her husband would likely upgrade his vehicle because his current 2017 Chevy had been giving them problems.
MONEY MOVES
Ramsey gave his two cents on Sarah’s approach to their winnings, emphasizing that creating a budget before the couple officially received the money was crucial, as was sticking to the spending guidelines they set.
He advised them to list out each expense, from the taxes and house payment to their credit cards and car upgrade, as well as anything else they intended to spend the money on.
The financial expert said the winners should carefully determine where each dollar would be spent, whether that be a new couch, a vacation, retirement funds, investing, or anything else they wanted – as long as they did not spend more money than they had won.
Top lottery winners in the US
Millions dream of winning the lottery and finding fame and fortune. These are the biggest winners in US lottery history.
- Edwin Castro – $2.04 billion, Powerball, Nov. 8, 2022, in California.
- Theodorus Struyck – $1.765 billion, Powerball, Oct. 11, 2023, in California.
- Unknown winner – $1.602 billion, Mega Millions, Aug. 8, 2023, in Florida.
- Marvin and Mae Acosta from Los Angeles, California, John and Lisa Robinson from Munford, Tennessee, and Maureen Smith and David Kaltschmidt from Melbourne Beach, Florida – $1.586 billion, Powerball, Jan. 13, 2016.
- Unknown winner – $1.537 billion, Mega Millions, Oct. 23, 2018, from South Carolina.
- Unknown winner – he sued the mother of his child to keep his identity hidden – $1.348 billion, Mega Millions, Jan. 13, 2023, from Maine.
- Unknown winner – $1.337 billion, Mega Millions, July 29, 2022, from Illinois.
- Cheng and Duanpen Saephan, and Laiza Liem Chao – $1.326 billion, Powerball, April 7, 2024, from Oregon.
- Rosemary Casarotti – $1.22 billion, Mega Millions, December 27 2024, from California
- Unknown winner – $1.13 billion, Mega Millions, March 26, from New Jersey
“The thing that gets lottery winners in trouble is when they get half a million and they go spend $5 million,” warned Ramsey.
“The people that have regrets and that others tell ugly stories about after they win the lotto are those that are not intentional. You have to be very careful and very intentional.”
The expert also warned Sarah and her husband to be realistic about the amount of money they had won.
“Don’t walk around acting like you’re rich because you’re going to figure out pretty quick you’re not rich,” he said.
“You didn’t get $5 million, you got $500,000, and it’ll be gone in about an eye blink if you’re not really, really careful.”
Sarah agreed that caution was key, expressing her fear that she and her husband would overspend their lottery money.
“I’m just scared it’ll be gone before we know it,” she said.
Ramsey assured the woman that the prize money would not vanish if she followed his advice, developing a plan for the cash before its arrival alongside her husband and sticking to it.
If you’re hoping to win the lottery like Sarah and her husband, a lotto expert shared his nine-word rule for winning big every time you play.
Plus, winning the lottery depends on where you buy your slip – see why you should always avoid 7-Eleven and Circle K.
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