Money & Peace Series: • The Running Away Fund • Scared to Spend Money on Yourself?

Why Lottery Winners Go Broke (and What It Teaches You About Money)

Here's a thing that should be impossible, but happens all the time: people win millions on the lottery… and a few years later they're broke. Skint. Sometimes worse off than before they won.

Millions of pounds — gone. How? You'd think it couldn't be done.

But it tells you the single most important truth about money, the one nobody ever sits you down and explains: having money and knowing how to keep money are two completely different things. One is luck. The other is a skill. And here's the good news that changes everything — a skill can be learned. By you. Starting now. There's no magic windfall coming to save you, and you don't need one. The magic trick was never the lottery. The magic trick is you.

First, the Secret Nobody Tells You: Money Doesn't Disappear. It Moves.

Before we touch the lottery winners, you need the one idea that the whole of money sits on. It's the first thing they teach you in accounting, and it's this: every debit has a credit.

In plain English: money never vanishes. It only ever moves. When you hand over a fiver for a bag of grapes, that fiver doesn't disappear into thin air — it becomes the supermarket's money. Your debit (money out) is their credit (money in). Every single penny that leaves you lands in someone else's pocket. Money is always, always flowing somewhere.

And once you truly get that, the whole game changes — because now there's only one question that matters: which way is the money flowing for YOU? Are you mostly the credit… or mostly the debit? Because you want to be the one money flows towards more than it flows away from. Keep hold of this idea — it's the thread through everything below.

So Why Did the Lottery Winners Lose It All?

Now it makes sense. The winners who went broke were all debit. Money pouring out in every direction — mansions, flash cars, gifts, holidays, hangers-on — and almost nothing flowing back in. They became everyone else's credit. The builder's credit, the car dealer's credit, the so-called mate's credit. The money flowed out and never learned the way back.

They never learned to respect money — to understand that it's a current you have to keep running in your favour. They got the millions without the skill, and without the skill, the money just… found the door. Which proves the whole point: it was never about how much you get. It's about whether you can keep the flow running your way. And that, unlike a lottery ticket, is something you can actually learn.

The Words That Run the Game (Tap Any to Learn It)

Right — let me teach you the words the "good with money" lot know, the ones that were probably never explained to you. No shame here, and no showing off. Just tap any word and I'll tell you exactly what it means, in plain English.

The first two are the whole foundation. An asset and a liability are simply opposite directions of flow.

Asset: Something that puts money INTO your pocket, or grows your wealth — savings, investments, things that earn or build. The stuff working for you. (Assets keep you on the credit side.)

Liability: Something that takes money OUT of your pocket — debts, and things that cost you to own. The stuff working against you. (Liabilities keep you on the debit side.)

This is exactly where the lottery winners came unstuck. They bought liabilities and thought they were buying wealth. A great big house costs a fortune to run. A flash car? That's the perfect example of depreciation in action.

Depreciation: When something loses value over time. A brand-new car can drop thousands the second you drive it off the forecourt — so it's a liability dressed up as an asset. It costs you to buy it and it's worth less every day.

What they didn't watch — what nobody had taught them to watch — was their cash flow.

Cash flow: The money actually moving in and out of your hands over time. More coming in than going out = good cash flow. The reverse = trouble, no matter how rich you look on paper. You can "own" a lot and still go under if the flow runs the wrong way.

And the real scoreboard — the number that actually tells you where you stand — isn't the flashy stuff at all. It's your net worth.

Net worth: Everything you own minus everything you owe. Your credits minus your debits, basically. It's the honest snapshot of where you really are — not the car on the drive, but what's actually left when you do the sums.

Interest: The One That Works on You Both Ways

Now the big one. If there's a single word that separates people who keep money from people who lose it, it's this one: interest.

Interest: The price of money. What you PAY when you borrow it, and what you EARN when you save it. It's the same force — it just depends which side of it you're standing on.

Here's why it matters so much: interest works on you in both directions, and most people only ever feel the bad one.

The dangerous direction: interest on what you owe

Borrow money — especially on credit cards — and interest works against you. It compounds, which means it piles up on itself, so the debt grows while you're asleep, doing nothing. That's the tide quietly pulling you out to sea. This is the interest to get rid of first, because it's draining you every single day.

The brilliant direction: interest on what you save

Now flip it. Save money, and that exact same force works for you. Your money earns money, and then that earns money — growing while you sleep, for doing absolutely nothing. Same tide, now carrying you in. This is the side you want to be on.

And here's where you get to play the game a bit. The banks compete with each other on interest rates — so you don't owe any of them your loyalty. You move your savings to whoever pays you the best rate, and you can move expensive debt to whoever charges the least. You make the banks earn you, instead of sitting still and letting a rubbish rate quietly short-change you for years.

One honest word, mate to mate: I'm teaching you how interest works — I'm not telling you to cleverly juggle debt against savings to make a profit. For most of us, the interest charged on debt is higher than the interest earned on savings, so the simple, safe winner nearly every time is: clear the draining debt first, then build the saving. Knock out the tide that's pulling you under, then ride the one that carries you in. Don't gamble with it — just understand it, so it stops being done to you.

So Here's the Whole Game

Pull it all together and it's beautifully simple. Remember: every debit has a credit, money always flows somewhere, and you want to be the credit more than the debit. So —

• Assets and savings put you on the credit side. Build them.
• Liabilities and debt keep you on the debit side. Shrink them.
• Interest is just the flow speeding up — for you when you save, against you when you owe.
• And the golden rule under all of it: keep more than you spend. Earn more than goes out, hold on to the difference, and point the flow in your direction.

That's it. That's the entire skill the lottery winners never learned — and it's the skill that lets someone on an ordinary wage quietly end up steadier than a millionaire who never got taught.

The Magic Trick Is You

So no, there's no windfall coming to rescue you — and after reading this, you know you don't need one. The lottery winners had the windfall and lost the lot, because money without the skill runs straight through your fingers. But the skill, even without a windfall, quietly builds wealth on the most ordinary of incomes.

You are not bad with money. You almost certainly were just never taught — and being untaught isn't the same as being stupid, not by a mile. The proof? You just sat and learned six of the words that run the whole game. That's the skill starting, right there.

So be the credit, not the debit. Keep more than you spend. Make interest work for you instead of on you. And stop waiting for a magic number to land in your lap.

There is no magic trick. The magic trick is you — learning the skill, one word at a time.

Love, Vikki x

Frequently Asked Questions

Why do lottery winners go broke? +

Because winning money and knowing how to keep money are two completely different things. Many big winners never learned the skill of managing money, so they spend on things that drain them rather than build them, and the money flows straight back out. It isn't bad luck or stupidity — it's a missing skill. The good news is that the skill can be learned by anyone, on any income, which means you don't need a windfall to become good with money.

What's the difference between an asset and a liability? +

An asset puts money into your pocket or grows your wealth — savings, investments, things that earn. A liability takes money out — debts, and things that cost you to own and lose value over time. The simplest test is to ask: does this put money in, or take money out? Wealthy-looking things like flash cars are often liabilities in disguise, because they drain money rather than make it.

How does interest work for and against you? +

Interest is the price of money: you pay it when you borrow and you earn it when you save. On debt, interest works against you — it compounds, so what you owe grows over time, which is why credit card debt is so dangerous. On savings, the same force works for you — your money earns money while you sleep. The aim is to clear the debt interest that's draining you, then let savings interest, at the best rate you can find, build in your favour.

What does "every debit has a credit" mean? +

It's a basic law of accounting: money never disappears, it just moves. Every pound that leaves you (a debit) lands somewhere else as someone else's gain (a credit). When you buy your shopping, that money becomes the supermarket's credit. Once you see that money is always flowing somewhere, the whole game becomes making sure it flows in your favour — being on the credit side more often than the debit side, by earning and keeping more than you spend.

How do I actually get good with money? +

You learn the skill, one piece at a time — you're not bad with money, you most likely were just never taught. Start by understanding a few basics: what's an asset versus a liability, how interest helps you when you save and hurts you when you owe, and the simple rule that you need to keep more than you spend. You don't need a big income or a windfall to begin. You need the knowledge, and the willingness to learn it, which you already have.

More on the blog:
• The Running Away Fund
• Scared to Spend Money on Yourself? The 25% Rule
• How to Start Over in Your 40s
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A friendly note: This is general money education from one ordinary woman who happens to know her way around the numbers — it's not personalised financial advice, and your own situation is unique to you. If you're struggling with debt, please know there's free, kind, non-judgemental help in the UK that won't try to sell you anything: MoneyHelper, StepChange, and Citizens Advice. Asking for help with money isn't a failure — it's one of the smartest, bravest money moves there is. You're not bad with money. You're just getting started.