We Just Won The $1,000,000 Lottery Off A Scratch-Off Ticket

Summary

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Overview

This episode of The Ramsey Show Highlights features a caller whose family recently won $1,000,000 from a scratch-off lottery ticket. Host Dave Ramsey and a co-host guide the caller through their shock, discussing how to wisely handle this unexpected windfall. The main theme centers around thoughtful financial planning, tax considerations, and the emotional realities of coming into sudden wealth.

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Key Discussion Points & Insights

The Lottery Win: Initial Reaction

• Caller’s Story (00:06): The caller recounts her husband spontaneously purchasing a scratch-off ticket, which turned out to be a $1,000,000 winner. Both are still in disbelief weeks later.

  Quote:

  "We’re still in shock."
  — Caller (00:24)

• Husband’s Response (00:33): In his excitement, he drove home, leaving the car temporarily forgotten and struggling to explain what happened to his wife.

  Quote:

  "He couldn’t make... he couldn’t even make a sentence."
  — Dave Ramsey (00:40)

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Navigating Lottery Payouts and Taxes

• Claiming the Prize & Taxes (01:02–01:59):

  • The couple chose the lump sum option—$600,000.
  • After taxes (anticipating state and federal deductions), they expect to receive a little over $400,000.

  Quote:

  "It ends up being we both agree to take the lump sum, which ends up being $600,000."
  — Caller (01:18)

  Quote:

  "After taxes, it ends up being a little bit over 400,000."
  — Caller (01:49)

• Dave Ramsey’s Caution on Advice (02:46–03:57):

  • Emphasizes the need for a certified tax professional rather than relying on information from the internet or lottery officials.
  • Recommends using a vetted provider (Ramsey ELP) to ensure accuracy.

  Quote:

  "We don't research numbers this big. We don't research information on the internet. Everything on the internet's true. Abraham Lincoln said that. Not."
  — Dave Ramsey (03:05)

  Quote:

  “It’s gonna be worth a thousand dollars or whatever it is, 500 bucks to get some professional tax advice. That's the first thing you do.”
  — Dave Ramsey (03:24)

• Ramsey's Optimism About the Tax Outcome (03:57):

  "I think the numbers you got might have been aggressive. I don’t think your taxes are going to be quite that bad. But they are going to be bad."

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Making a Plan: Debts and Expenses

• Caller’s Priorities (04:18–04:28)

  • Pay off their mortgage (~$100,000 left)
  • Eliminate credit card debt (~$23,000)

  Quote:

  “I like those plans. Those are good plans.”
  — Dave Ramsey (04:39)

• Vehicles (04:46–05:20)

  • Both cars are paid off; caller’s car is reliable, husband’s is “starting to give him a little bit of car problems.”

  Quote:

  "So you put a budget on that, and you don’t break that budget."
  — Dave Ramsey (05:21)

• Household Income (05:28–05:41)

  • Husband: ~$50K/year, Caller: ~$40–45K/year
  • Dave warns about “lottery curse” stories that result when people aren’t intentional.

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The Ramsey System: Budgeting and Avoiding Pitfalls

• Intentional Spending (05:41–06:51):

  • Lay out priorities before the money arrives.
  • Decide what gets paid first: taxes, debts, car upgrades, investing, fun.

  Quote:

  "People that have regrets... after they win the lotto are those that are not intentional. You have to be very careful and very intentional."
  — Dave Ramsey (05:42)

  Quote:

  "The things that get lottery winners in trouble is when they get a half a million and they go spend 5 million."
  — Dave Ramsey (06:42)

• Step-by-Step Approach (06:58–08:45):

  • Create a detailed budget: start at the top with anticipated post-tax amount, subtracting each planned expense.
  • Include generosity, investing, celebrations, and practical needs—whatever both agree on.
  • Avoid lifestyle inflation and “acting like you’re rich.”

  Quote:

  "Don’t walk around acting like you’re rich because you’re going to figure out pretty quick you ain’t rich."
  — Dave Ramsey (07:14)

  Quote:

  "Write down where every one of these dollars [is]—give them every name before they come."
  — Dave Ramsey (07:54)

  Quote:

  "Develop a plan and then it's boring. You just execute the plan."
  — Dave Ramsey (08:46)

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Investing for the Future

• Seeking Professional Investment Advice (09:04–09:22):

  • Dave suggests sitting with a “SmartVestor Pro” with a “heart of a teacher” to plan how to invest the remaining funds.
  • Potential for dramatic growth if invested carefully and consistently.

  Quote:

  "If you invest $300,000 in seven years, it'll be $600,000. In seven more years it'll be $1.2 million. In seven more years, it'll be $2.4 million."
  — Dave Ramsey (09:38)

• Change the Family Tree (09:52):

  • The windfall provides a rare opportunity for financial transformation, but only if managed intentionally.
  • Reinforces need to plan, budget, save, and invest wisely.

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Notable Quotes & Memorable Moments

• Caller’s disbelief:

  "We’re still in shock." (00:24)

• Dave on tax information:

  “Everything on the Internet's true. Abraham Lincoln said that. Not.” (03:05)

• On the lottery curse:

  "The things that get lottery winners in trouble is when they get a half a million and they go spend 5 million." (06:42)

• On acting rich:

  "Don’t walk around acting like you’re rich because you’re going to figure out pretty quick you ain’t rich." (07:14)

• On investing windfalls:

  "If you invest $300,000 in seven years, it'll be $600,000... In seven more years, it'll be $2.4 million." (09:38)

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Timestamps for Important Segments

• 00:06–01:02: Caller describes winning and immediate reactions
• 01:02–01:59: Discussion of lottery payout structure and taxes
• 02:46–03:57: Ramsey’s instruction to seek licensed tax professionals
• 04:18–04:28: Caller outlines priorities: pay off house and credit cards
• 05:41–06:51: Ramsey on intentionality and dangers of poor planning
• 06:58–08:45: Step-by-step budgeting and emotional planning
• 09:04–09:52: Importance of working with an investment expert

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Key Takeaways

• Don’t rely on quick advice—consult real professionals before moving forward.
• Prioritize debts and necessary expenses first, not splurges.
• Create a detailed budget and stick to it to avoid the “lottery curse.”
• Invest for long-term growth, not instant gratification.
• Plan ahead and manage emotions—make the big decisions before the check clears.

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This episode offers a concise masterclass in handling sudden wealth with caution, humility, and intention—classic Ramsey wisdom, underlined by actionable steps and a touch of humor.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Caller (Lottery Winner)]

Me and my husband were blessed about three weeks ago when he just went into the local gas station and just grabbed a random scratch off lottery ticket. Ended up being a $1 million scratch off ticket.

[Co-host or Guest]

You gotta be kidding me.

[Dave Ramsey]

Wow.

[Co-host or Guest]

Are you for real?

[Caller (Lottery Winner)]

Yes. Yes. We're still in shock.

[Dave Ramsey]

I'll bet. Oh, my.

[Co-host or Guest]

Tell me really quick, how did that. How did he tell. What was that like?

[Caller (Lottery Winner)]

Oh, confused. I was completely confused. He. I don't know. He panicked.

[Dave Ramsey]

He couldn't make. He couldn't even make a sentence.

[Caller (Lottery Winner)]

Exactly. He ran home, which was only just a couple blocks away, and I forgot the car. Understand? Yeah.

[Co-host or Guest]

Where was the car?

[Dave Ramsey]

That's great.

[Caller (Lottery Winner)]

Well, he drove home. He drove home.

[Dave Ramsey]

I'm kidding.

[Caller (Lottery Winner)]

He probably shouldn't have because he was so. So.

[Dave Ramsey]

That's so fun.

[Caller (Lottery Winner)]

Wow.

[Dave Ramsey]

Okay. So have you been. You've been in contact with the state, I assume?

[Caller (Lottery Winner)]

Yes, we just claimed it about a week ago. We tried to do our research. We are way in overhead.

[Dave Ramsey]

Yeah.

[Caller (Lottery Winner)]

It ends up being we both agree to take the lump sum, which ends up being $600,000.

[Dave Ramsey]

Right.

[Caller (Lottery Winner)]

Which we are still happy and feel very blessed to have that.

[Dave Ramsey]

It's more than you had the week before.

[Co-host or Guest]

Now, you have a different appreciation for taxes, don't you?

[Caller (Lottery Winner)]

Yeah.

[Dave Ramsey]

Now, that's the lump sum because the million was a payout over a number of years. But that's not net of taxes, correct?

[Caller (Lottery Winner)]

No. After we finally receive it, which would probably be another month or so. And after taxes, it ends up being a little bit over 400,000.

[Dave Ramsey]

Yeah.

[Caller (Lottery Winner)]

Yeah.

[Dave Ramsey]

Hello? Well. And who told you that? Who told you that?

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[Dave Ramsey]

Who told you that?

[Caller (Lottery Winner)]

Oh, when we went to go claim it, they broke it all down for us. I mean, that's kind of.

[Dave Ramsey]

The state told you that?

[Caller (Lottery Winner)]

My research. Yeah.

[Co-host or Financial Advisor]

Okay.

[Dave Ramsey]

No, no, no. Stop. Okay, stop. First thing we're going to do is get a tax professional okay. To find out what's real and what's not there. And state of Illinois has a tax, and of course, the federal government has a tax in the United States, so. But you need a tax professional that can sit down and work it all through. We don't research numbers this big. We don't research information on the Internet. Everything on the Internet's true. Abraham Lincoln said that. Not. So you get bad information there, and you get bad information when you use bad bureaucrats at the state who hand out lottery proceeds. They're not tax professionals. So it's gonna be worth a thousand dollars or whatever it is, 500 bucks to get some professional tax advice. That's the first thing you do. And you can get one. Just go on ramseysolutions.com, find an ELP and endorsed local provider that does taxes. That is Ramsey trusted that we have vetted, and we know what they're doing, and they need to go. And you need to feel very calm and peaceful when you leave their office after having learned about what the actual taxes are. And they can show you in just a few minutes to the penny.

[Caller (Lottery Winner)]

Okay.

[Dave Ramsey]

I think the numbers you got. I think the numbers you got might have been aggressive. I don't think your taxes are going to be quite that bad. But they are going to be bad.

[Co-host or Financial Advisor]

Okay.

[Caller (Lottery Winner)]

Yeah.

[Dave Ramsey]

So, yeah, you're going to learn about that. Then you figure out what you've got left after taxes, and then what are you going to do?

[Caller (Lottery Winner)]

Two things that we planned on is we want to pay off the house, and we do have credit card debt.

[Dave Ramsey]

Okay. How much are those two things?

[Caller (Lottery Winner)]

The house is right underneath 100,000. And then our credit card debt would be about 23,000.

[Co-host or Financial Advisor]

Okay.

[Dave Ramsey]

I like those plans. Those are good plans.

[Co-host or Financial Advisor]

Okay.

[Dave Ramsey]

And what do you drive?

[Caller (Lottery Winner)]

I drive a Kia. My husband and I both have cars that are completely paid off.

[Dave Ramsey]

I know. What are they? How old are they? How worn out are they?

[Caller (Lottery Winner)]

Mine's still in great condition. I think it's a 2015, so you.

[Dave Ramsey]

Don'T need to upgrade yours. What about his?

[Caller (Lottery Winner)]

I think he probably wants to upgrade his because it's starting to give him a little bit of car problems. We've been having to fix it up a little bit.

[Dave Ramsey]

What is it?

[Caller (Lottery Winner)]

It's a 2017 Chevy. So this is a little bit newer, but like I said, his has given us a little issue lately.

[Co-host or Financial Advisor]

Okay.

[Dave Ramsey]

So you put a budget on that, and you don't break that budget. What's your household income?

[Caller (Lottery Winner)]

Good question. I believe he makes about 50,000 a year. I probably make a little under that. 40 or 45 a year.

[Dave Ramsey]

So the people that have regrets and that people tell ugly stories about after they win the lotto are those that are not intentional. You have to be very careful and very intentional. So kind of what we're doing right now is what I would recommend, and that is we begin to lay out before the money gets here after meeting with the tax person. First thing we do is pay taxes. Second thing we do is this. Third thing we do is that. And so on. And you basically have a budget. You know, say we've got $500,000 or whatever the number is, and we spend that. So we've spent 123. We put another 20 on car, so we spent 143. What are we going to do with this? We're going to give some. We're going to invest some. We're going to invest a lot, and we're going to go on with our lives by being on a budget and not tap into this money. And I don't care if you want to go on a trip and celebrate. I don't care if you want to upgrade your couch. All of those things are fine. Those aren't the things that get lottery winners in trouble. The things that get lottery winners in trouble is when they get a half a million and they go spend 5 million.

[Caller (Lottery Winner)]

Yeah, that's what I'm afraid of. I want to be very careful. Like I said, I'm overwhelmed. I didn't know where to start.

[Dave Ramsey]

The way you eat, an elephant's a bite at a time. So we're going to write the number at the top of the page that we're getting after. And then minus taxes and then minus House. Exactly. Minus credit cards. And cut them up so they don't grow back.

[Caller (Lottery Winner)]

Yes.

[Dave Ramsey]

And don't walk around acting like you're rich because you're going to figure out pretty quick you ain't rich. This is sweet and it's very nice and I'm happy for you, but you didn't get 5 million. You got 500,000. And it'll be gone in about an eye blink if you're not really, really careful. So I kind of want you to be in a not. Not terrified and not paralyzed with fear, but I want you to have a healthy fear, a healthy respect of someone just handed you a loaded gun and you don't know anything about guns. Be very careful to learn.

[Caller (Lottery Winner)]

I have that fear already.

[Co-host or Financial Advisor]

Okay?

[Caller (Lottery Winner)]

That is why I called it, guys. I'm just scared. It's Gonna be gone before we know it.

[Dave Ramsey]

No, no, no, no, it won't be if you do what I'm talking about. If you write down where every one of these dollars give them every name before they come. We're going to put 150,000 in savings. We're going to spend 50,000 renovating this. We're going to go on a cruise for 10,000. I don't care what it is, as long as when you total it all up, it equals the amount you're going to get. And just make a list down the page until every dollar is going into something. Generosity, investing, fun, upgrade car, pay off credit cards, trip, couch. I'm making these things up. I don't know what they are. Okay. But write them down. And then both of you look at that and you've got a little time to get ready emotionally before. And so when the check comes, it's boring. Yeah, because you just execute your little list.

[Caller (Lottery Winner)]

Right?

[Dave Ramsey]

And there's no emotion. There's no four year old dancing around the kitchen. We've already had that moment. That was pretty cool. I'm okay with that. But don't dance around the kitchen after you get the check and change your plan. Develop a plan and then it's boring. You just execute the plan.

[Caller (Lottery Winner)]

Got it?

[Co-host or Financial Advisor]

Okay.

[Dave Ramsey]

Now the second person I'm gonna send you to is you need to sit down with a SmartVestor Pro. Someone to help you learn about investing and decide where you're going to invest some of this.

[Caller (Lottery Winner)]

Yeah.

[Co-host or Financial Advisor]

Okay.

[Caller (Lottery Winner)]

I would really appreciate that. Cause we really don't have much of a.

[Dave Ramsey]

And they, they need to have the heart of a teacher and they can show you. Okay, you could put this much into a Roth, you could put this much into this. And you can start your mutual funds over here and so on. How old are you guys?

[Caller (Lottery Winner)]

40. I'm 40. My husband's 39.

[Dave Ramsey]

If you invest $300,000 in seven years, it'll be 600,000. In seven more years it'll be a million two. And in seven more years it'll be 2.4.

[Caller (Lottery Winner)]

That would be nice.

[Dave Ramsey]

Yeah. But you gotta keep your stinkin hands off of it and you gotta invest it. So go to ramseysolutions.com and click on Smartvestor Pro. And sit down with someone with the heart of a teacher. You get a real opportunity to change your family tree if you're careful. Create your free every dollar budget today. The simplest way to budget for your life.