Jan 15, 2025
Most people who regularly play the lottery dream of winning a large payout one day — but few ever get to experience that dream becoming a reality.
Fortunately, thanks to one woman in South Carolina, even those who don’t play the lottery can now get a firsthand look at what it looks like when that dream comes true.
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In a clip from a security camera shared by the owner of a gas station in Fort Mill, you can see an unidentified woman jump for joy and hug an employee after realizing she’d won $250,000 from a $5 scratch-off ticket.
The gas station owner told WSOC-TV News that the woman is a regular customer who plays multiple lottery games a week. He noted, “I see her every day, and I'm glad to see her finally win something big.”
The woman has reportedly since cashed in her winning ticket at the Columbia lottery headquarters.
As she’s sure to find out soon, winning a large sum of money can be an exciting and life-changing event. Should you find yourself fortunate enough to win one day — or maybe come into a windfall — it’s important to make careful decisions about how you spend your money. Here’s what you need to know before you start spending.
Draft a financial plan with help from an expert
Before spending a cent, you need to come up with a solid financial plan. A good rule of thumb after coming into a significant windfall is to reevaluate your spending habits and outline a sustainable budget.
While $250,000 may seem like a lot of money, if you’re not intentional about how you allocate it, it could disappear pretty quickly. Depending on how much money you’ve come into and where you currently stand financially, consider bringing in a financial adviser. A professional can provide guidance on the best strategies that align with your financial goals — which may also change now that you’ve come into money.
For example, if you have outstanding debt, an adviser can determine the best approach to using your windfall earnings to eliminate said debts — especially if it’s high-interest. You’ll want to go into your meeting with a handy list of any debts and current account balances.
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Prepare to have to share
Another consideration is the tax implications of your lottery winnings. You don’t want to be hit with a surprise tax bill after you’ve already spent all your prize money.
Many people assume that winning the lottery is straightforward — and that the advertised jackpot would get paid out to the winner in that exact amount. However, lottery winnings are considered taxable income that is subject to federal and (sometimes) state income taxes, depending on where you live.
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For taxpayers with lottery winnings over $5,000, the IRS requires lottery agencies to withhold 24% of all earnings for federal taxes. If your windfall puts you in a higher tax bracket, you may owe additional federal tax when you file your tax return.
In South Carolina, the state withholds income tax for lottery winnings over $500. But many states — including South Carolina — impose an additional tax on lottery winnings. The Palmetto State tacks on an extra 7% tax on lottery winnings, something the winner from the gas station will have to take into consideration.
A financial adviser or tax planner can help you plan accordingly so you set aside enough to meet any tax liabilities.
Set up an emergency fund
While you'll likely want to spend and invest most, if not all, of your windfall, setting aside a portion for an emergency fund maybe a wise decision.
Having extra cash that is easily accessible can help you weather any sudden situations that may arise, from helping pay unexpected medical bills to repairing a leaky roof or broken furnace.
How much you’d set aside depends on your financial situation and lifestyle. Many experts suggest having at least three to six months' worth of savings to cover your regular living expenses in the event of a job loss or major home repair. If you’ve come into a sizable windfall, you may even want to set aside enough money to cover bills for an entire year. J
Keeping your emergency fund in a bank account that earns a bit of interest is a great strategy. This way, you’ll earn more money while your cash is parked in the bank. Many of the best high-yield savings accounts offer competitive interest rates, allowing you to further maximize your winnings.
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Natasha is a personal finance writer with nearly a decade of experience. Her work has appeared in numerous publications, including NerdWallet, USA Today, Yahoo Finance, and Newsweek.
