Lottery Winners Who Lost It All: What Can We Learn?

The Certified Financial Planner Board of Standards reports that one-third of lottery winners not only lose their winnings – but they end up declaring bankruptcy in fewer than five years after winning.

Why are lottery winners more likely to lose all their money than the rest of us?

Let’s look at the top lottery winners who lost it all, why lottery winners are more likely to file for bankruptcy, and what we can learn from their mistakes.

Why Lottery Winners Lose All Their Money

There are a lot of reasons why lottery winners are more likely to lose money than the rest of us. And most lottery winners who lose it all don’t go broke for the same reasons.

The top reasons why winners lose their winnings include:

• Spending above their means

• Giving/loaning money to friends and family

• Failing to budget for taxes

• Falling victim to fraud

• Feelings of loneliness/guilt because of their winnings

• Poor financial planning

Lottery Winners Who Lost It All

Callie Rogers: At only 16 years old, Rogers was the youngest person to win the lottery in Britain. Yet, she lost more than $2 million after quitting her job and spending all of her winnings.

Lara and Roger Griffiths: Won over $2 million but ended up losing their winnings because their house caught fire, and they needed to pay for repairs.

Suzanne Mullins: Struggled to pay her son’s medical debt with the more than $4 million she won playing the lottery.

Sometimes lottery winners don’t “make bad choices;” they simply are susceptible to bad luck, too.

What Can We Learn From This?

If you’re lucky enough to win the lottery, you’ll want to learn from these mistakes. And every winner is different. Good financial planning doesn’t look the same for everyone.

Yet, experts agree that winners should follow a few tips before spending their winnings, including:

• Using winnings to pay off debt

• Budgeting large expenses

• Setting boundaries with friends and family

• Giving themselves an “allowance”

• Hiring a financial planner

• Setting aside money for retirement

Since many lottery winners overspend because they aren’t prepared for the possible loneliness of suddenly jumping up several tax brackets, experts also suggest investing in mental healthcare services.

You may also want to consider focusing on purchases that truly increase your happiness, instead of simply spending money just because you can.