I admit it. I’ve played lotto. Two dollars here and there—usually on a Friday—when I’m stuck in line at a bodega waiting to pay for my weekend indulgence of fashion magazines. If that jackpot gets over $100 million, something in my reptilian-reactive brain says, “Woo-hoo!”
But that’s what it’s all about: Playing lotto should be about entertainment—not a wish, hope and prayer that this gamble, this one time, you’ll be saved, delivered, from all your financial stress. Unfortunately that’s what millions of Americans think every time they play—that lotto is a ticket to financial freedom.
According to a fascinating new report, “Confronting the Debt Culture,” pulled together by several think tanks and the Institute for American Values, there is a whole class of Americans they name the “lottery class.” Instead of socking away money regularly into 401ks and interest-bearing savings accounts or paying off debt, 20% of Americans spend $60 billion a year on lotto. And it’s not only lower-income Americans looking to lotto to solve financial problems. I know, I stand behind them in line in their nice clothes as they rattle off favorite ‘picks’ and hand over $50 to the machine or ‘scratch’ cards—fifty bucks! Or maybe it’s that credit-repair service you’re tempted to sign up for, which is probably illegal and will cost you up the nose in up-front fees anyway. But hey, they’ll fix your credit, right?
The truth: There is no quick fix. Like your momma told you: “Clean up your own mess.” We all have to. And yes, it stinks. But once you realize that you have no control over what numbers will pop up on Saturday but you do have control over setting up an automated credit card pay-off plan or automated savings or investing, (putting away $20 a week, averaging 8% a year for 10 years gets you $16,000. Hold on for 20 years for over $50,000) suddenly standing in line with that valuable Jackson takes on new meaning.
Do you have a former lotto habit or are you tempted by other ‘quick fixes’? What else can you do—or did you do—with that money? Carmen@cnbc.com
Carmen: Thank you for all of your insight on the variety of topics. The information that you give is very informative and it's nice to see questions asked by ordinary people with similar credit issues. People like myself that are just hard-working people, just trying to survive through all the pitfalls that can occur sometimes, its nice to have someone on our side. Thank you. --Lisa, NJ
Posted on: 11 Jun 2008 3:51 P.M.
First lifes lesson: Don't run up your credit card to over $1,0000. I did that back in the '90s and I learned from it. In these lean times, I've learned to save. I mean save real big. No matter how much one gets paid, I strongly suggest that everyone save some money. Invest wisely. Cut back on nonessentials. Don't drive if you don't have to. The more you save--the more wealthy you become. --Chuck, MS
Posted on: 11 Jun 2008 2:27 P.M.
Looking to "score" with a quick turnaround in a stock as psuedo-traders falls into the lottery class also. Of course, there's the guy down the hall who's brother's neighbor's third cousin that bought into a plummetting stock and is now rich. So people hang their hats on the hope of just different types of "lotto." --Rob, FL
Posted on: 11 Jun 2008 11:17 A.M.