There’s a right and wrong way to spend your Powerball jackpot prize, as you can see in this compilation of some of the best and worst Powerball winner stories.
Truly, there is no bad way to spend your Powerball winnings, but there are sometimes bad results. Avoid the pitfalls of poor Powerball choices, by following these tips and Powerball spending best practices.
Resist being the high-roller
You struck it rich, to be sure, but avoid living richly at first. Extravagant gifts for yourself and others, spontaneous luxury travel, risky investments. There may come a time in which to enjoy and indulge in all of these things, but use the first 90 days after your win to live vicariously off your own future. Research every detail but leave the actual spending until later. You'll be glad that you did.
Best: Use the first 90 days to dream big and plan wisely. Research future adventures without diving in headfirst.
Worst: Blow it all on impulse buys and luxury trips before the money has even settled in your account.
Remember to budget
Experts say many Powerball jackpot winners who enjoyed financial security prior to their win actually go broke after winning for the simple reason they forget to budget. The first days, weeks, and months after a win are exciting times; you'll feel like you own the world, and in a way, you do. Budgeting will be your best friend: Seek out financial advice for your winnings and maintain your usual budget until you have a solid plan for a total financial picture.
Best: Stick to a financial plan and maintain your normal spending habits while crafting a long-term strategy.
Worst: Assume the money will last forever and lose track of your finances amid the excitement.
Avoid being an overnight venture capitalist
Most Powerball winners can't help telling friends and family about their win. Friends and family who are in your inner circle are likely to see dollar signs themselves, seeking financial support for their own dreams. Dreams are great, especially when they involve the people closest to you, but it is likely a mistake to start financing those dreams without professional input. A financial planner can help you set aside funds for appropriate investments at the right time; don't go it alone. Wait out the urge to become an overnight philanthropic sensation.
Best: Take time to consult financial professionals before investing in anyone else's dreams.
Worst: Hand over money to friends or family without a clear, thought-out plan.
Stay selective about charitable impulses
You're you, and you've always been a giver and a trailblazer. Charities will benefit from your goodwill, but just as there is an ideal time for major investments and for pleasure, there's an ideal time for charitable giving as well. Plan ahead before speaking with a financial advisor, and consider what portion of your winnings you would like to dedicate to charitable causes. Remember, also, that sound investments can yield additional earnings that may be dedicated to charitable institutions, so keep that in mind.
Best: Plan your philanthropic goals with care, setting aside funds for maximum impact over time.
Worst: Donate recklessly or to every request, leaving little for yourself or future giving.
Be yourself
You may feel like a celebrity with sudden wealth, but starting to live like a celebrity is a big mistake. Every year, the headlines feature some celebrities who filed for bankruptcy because they took a wrong turn with their lavish lifestyle. Don't let your life imitate that art. Carve out some luxury for yourself in your financial planning. Have you always imagined a bigger house? A fancier car? A boat? A private jet? Begin with a rental, a lease, or a charter as you ease into luxury waters.
Best: Ease into luxury living with measured steps, like renting or leasing, while staying grounded.
Worst: Adopt a celebrity lifestyle overnight, risking burnout and financial ruin.
Pace yourself after your win, and remember to breathe it all in. Enjoy the moment and take the time to plan how to use your Powerball prize money. And take a page from the playbooks of those who’ve won before you so you can make smart decisions with every dollar you save and spend.