What is The Best Way to
Use my Lottery Winnings?

Hey Taylor - I recently won the lottery!! I'm about to start getting weekly payments for the rest of my life. After taxes, it looks like I'll pull in just under $5,000 each week. I'm 30, my husband and I have steady jobs, retirement accounts, $400,000 left on our mortgage and almost $80,000 in student loan debt. What's the best thing to do with this money? - Marianne

Hey Marianne - That's some exciting news! Even more exciting is that you're asking for advice now instead of waiting until after you made some poor financial decisions, which is what most lottery winners do. You're off to a great start, and here's how I think you should proceed.

1. Pay down your loans. If you only paid the monthly minimum, the student debt you have would last a couple decades. If you put the majority of your winnings toward the loans over the next year, you can be free of that burden. That will save you a sizeable amount on interest payments, further boosting your cash flow. With the student debt gone, you can speed up mortgage payments and start investing the rest of your weekly earnings.

2. Fill your retirement accounts. After the debt is gone, increase the contributions to your retirement accounts. Now is a great time to build up your retirement savings, as the money you put in still has a few decades to work and grow. Between your paychecks and lottery winnings, you should be able to maximize these contributions and still have money left over, assuming you have paid off your loans.

3. Have fun investing. Not a lot of people have the opportunity to invest free winnings, so you should take advantage! What interests you? Do you want to get into real estate, either with a rental property or by flipping a house? Real estate is one of the best investments you can make, especially when you're able to pay in cash. You can also look into financing small businesses or personal loans, and I'd recommend you open a brokerage account and start buying quality stocks. There's no short, simple answer to the question of where you should put your money, but there are plenty of good investment options for you to look into. Talk to a financial advisor and see what piques your interest. Without acting rashly, you can still get creative with your investment techniques and have fun with it.