Blogging for Change

Lottery Do not play to win

by Kim McGrigg on
8/26/2010
in Personal Finance , Budgeting and Building Savings

Americans are saving more. The average savings rate is now more than 6% of post-tax income. In times of economic uncertainly, it is clear that many consumers believe that establishing a savings cushion is important to their financial well-being. Yet there are many other Americans who feel that establishing wealth is beyond their reach.

27% of Americans think that winning the lottery is the most practical way for them to accumulate wealth. Unfortunately for them, the odds of winning the PowerBall jackpot are 1 in 195,249,054. To put that in perspective, the odds of being killed by an asteroid are much more likely—about 1 in 700,000.

For those that do win occasionally, it rarely enough to cover their expenses. The average lottery player only wins $.53 for every dollar they play. The “return” is even less when you factor in the cost of gas to get to the store and the value of the time spent playing. Unfortunately, studies suggest that these losses are most often experienced by people who can least afford them.

According to a 1999 report to the National Gambling Impact Study Commission titled State Lotteries at the Turn of the Century, income has little relationship to lottery play overall up to $50,000, and drops off sharply at higher incomes. This fact suggests that “lottery expenditures represent a much larger burden on the household budget for those with low incomes than for those with high incomes.”

If you enjoy playing the lottery, then you should play for entertainment purposes only and include gambling expenses in your monthly budget. However, if you are playing the lottery because money is tight, you are probably just compounding the problem. Establishing a savings account (even with today’s low interest rates) is a far safer bet.

Do you play the lottery? If so, do you play just for fun or are you hoping for a big win?  Are gambling expenses part of your budget?

Budget Planner - Mint.com

 

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

Recommended Articles

Man sitting in front of pile of bills, trying to understand his options.
Professional Budget Advice
Make the most of every dollar and start building toward your dreams! Budget counseling is FREE and available 24/7.
Learn More
Learn more
  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Financial Counseling Association of America Financial Counseling Association of America
    MMI is a proud member of the Financial Counseling Association of America (FCAA), a national association representing financial counseling companies that provide consumer credit counseling, housing counseling, student loan counseling, bankruptcy counseling, debt management, and various financial education services.
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.9/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Department of Housing and Urban Development - Equal Housing Opportunity Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.