Lotteries are huge in Spain. You can buy them everywhere: in the small kiosks on every corner of the street, from the (usually handicapped) people that roam the terraces and restaurants, in the tobaccos and even from the presidente of our neighborhood association.
The biggest one is El Gordo, a Christmas lottery. The price money is about 2 billion euros. One ticket costs 200€, although you can buy a tenth of a ticket. It seems almost the whole of Spain is glued to the television screen when the result is announced.
Well, we are not too fond of lotteries and we don’t have a television either. So our Christmas Eve will be peaceful and quiet. 🙂
Most lottery winners are back to square one after 5 years. And that’s for the same reason why most people that receive a salary raise have not more money left on their bank at the end of the month. They are not educated in dealing with money.
It’s also called “One gig away from broke”. Lots of artists and sportsmen suffer from that. If something unexpected happens, and that next gig is off, disaster strikes.
This is one of the major achievements of Johan Cruyff. Apart from his amazing football career, he founded the Johan Cruyff Academy to teach sports professionals how to handle their money and how to prepare for a life after their sports career.
Plan to be financially healthy – do the boring stuff
To get a grip on your financial situation you have to know what comes in and what goes out. That is the simple truth #1. And truth #2 is even more simpler: don’t spend more than you earn.
And yes, it is boring to discover your financial situation, because you have to be a precise bookkeeper. Once you have written down all income and expenses for a year, you can look at the trend.
- What are truly necessary expenses;
- Is there an area where you spend lots of money;
- Can you decrease some expenses.
Of course it doesn’t matter if you write it by hand in a notebook or use one of the many apps that are available to note your figures.
Make room for your dreams
There is also a fun part of this bookkeeping: write down your dreams. Make it a fantasy. If you had all the money in the world how would your life look now.
When you have done that, you can hang price tags on each thing you have listed. Compare it with your present financial situation. Is there a way to work towards your dreams?
Investing is better
To pick up the story about the lottery again – one ticket of El Gordo costs €200. Not everybody spends that amount. The average amount people spend is €70.
The chance you win is if you buy a whole ticket is 1 in 100.000. I am no star in probability calculation, I just know it’s less if you don’t buy a whole ticket.
Had you invested that €70 every year with a conservative interest income of 3% for 40 years you would have had €5.208. Meaning you would nearly have doubled your investment.
Plan to be financially healthy
You can argue that an amount of €5.000+ in 40 years time is not very much. And if you planned on having your dream house when you retire it’s hardly the amount you need.
My point here is, that once you start planning your money instead of hoping for the best, you work actively on getting a financially healthy state. It will change your attitude towards money.
An extra word of advice for us women
Our generation is way more self supporting than our mothers’ generation. Still there is something to consider. Since women usually marry men that are older it’s more likely they will be a widow at some point. Will you still be able to sustain your lifestyle in the unfortunate event this happens?
Although it’s not a nice job, try to figure out beforehand how your financial status will be. Better yet, do it for the both of you.
Talking about money is often a tricky business. If you are looking for some guidelines on how to get a grip on your finances book a call with us.