The New Way to Save Money: Playing the Lottery – Facts So Romantic

Chris Goldberg via Flickr

Lotteries have often been called a tax on the poor and, alternately, a tax on the innumerate. There is something to both claims: Lottery tickets are disproportionately bought by lower-income people, and in aggregate the players win back only a small percentage of the money spent on tickets. Overall, lotteries suck money away from many people who can’t really afford it, and who should be socking that money away for more productive uses.

But some lottery players have found a way to get the thrill of gambling while also making the prudent choice to save a chunk of each paycheck. This is thanks to “prize-linked savings accounts”—each time an account-holder deposits a certain amount, they get a ticket for a raffle that includes cash prizes of various amounts. All of the money a participant spends on raffle tickets goes straight into their account, enticing them grow a nest egg and, perhaps more importantly, a habit of saving. “I didn’t have $500 to start a C.D., and when they said it was only $25, I knew I could do that,” said Cindi Campbell in an excellent New York Times article on the accounts. “I got…
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