How Most Lottery Winners Really Spend Their Money

Evan Lambert

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Person Holding Lottery Ticket With Dollars in Background

There are many popular misconceptions about the lottery, but one of the most enduring is that lotto winners immediately blow their cash on mansions and fast cars. The reality, as it turns out, is much more banal. In fact, winners often immediately spend their newfound money on everyday necessities — think: a haircut or an overdue parking ticket — before they consider enhancing their vehicles. 

In a popular 2018 interview with Vice, Matthew Hart of the Lottery Corporation said that he encountered fiscally conservative lottery winners more often than not. And considering that the man regularly made calls to winners informing them of their news, you’d expect him to have more stories of people whooping for joy. 

“I said to another winner, ‘what are you going to do with your win?’ And he said, ‘Oh, I’m going to the dentist,’” Hart told Vice. “Or my favorite was a man who said, ‘I’m going to go get a haircut.’ It seemed so trivial and it was clearly on their mind but they didn’t quite have the resources to do it beforehand.”

This tendency towards financial prudence often lasts more than a phone call, however. One Norwegian economic study has found that lottery winners are more likely to preserve their current social connections or living arrangements than to spend extravagantly on mansions or Ferraris. Of the 420 winners observed for that study, many saved or invested their winnings instead of “realizing any dreams of becoming someone else somewhere else.” 

It all sounds rather existential, but it rings true in the context of the recent two-time lottery winner Wayne Murray. Reportedly, the man still lives in his same apartment in Brooklyn (though he did purchase a fancy new car).

Of course, Scandinavians already have a reputation for prudence and practicality, so a Norwegian study isn’t representative of all winners. That said, a previous study on lottery winners in the United States found results that the Norwegian one would later echo. According to researcher H. Roy Kaplan Ph.D, American lottery winners often gave their winnings to family members or their churches rather than spending them on huge purchases (though many did buy new homes). 

Additionally, individuals with financially and psychologically rewarding jobs often continued to work. Kaplan added: “It was found that overall, winners were well-adjusted, secure and generally happy from the experience.” 

That’s a far cry from the horror stories we hear about “unfortunate winners,” but it’s also not totally representative. While it’s still a misconception that all winners waste their prize money on trivial purchases, it’s unfortunately true that many still do. One winner recently told Reader’s Digest: “After we won the lottery, we bought an eight-bedroom, seven-bath, 10,000-square-foot mansion because we could, and it sounded amazing. Well, now we’re selling the eight-bedroom, seven-bath mansion because it’s impractical for a family of four.”

Still, it’s human nature to avoid big changes in a bid for equilibrium. Perhaps that’s why the lottery winners, in this 2009 study, opted to take temporary leave from work instead of quitting their jobs entirely. However, this may also be due to cultural attitudes towards work. The participants in that study were Swedish, but similar studies of American workers and British workers found that 85 percent of American lottery winners kept their same jobs, while only 41 percent of British winners did the same. Apparently, the American dream never truly dies. Or, Americans are just better at internalizing capitalism. Or, like we said, people just don’t like change.

In any case, the fact remains that lottery winners don’t usually buy a Ferrari for their first purchase. Whether they’re immediately going out and getting a haircut, or setting up an appointment with a financial planner, the first impulse of any lottery winner is usually to process what just happened and make the smartest move possible. It’s also natural to want to share the love. As another winner told Reader’s Digest, “Now that I can buy anything I want, I’ve learned that what really matters — and what I enjoy most — is being able to do things that help other people.”