Money Management

Some states have much lower average lottery payouts. Check out the worst states to play the lottery and learn why it’s nearly always a poor financial decision. [[{“value”:”

The odds of winning the lottery are slim no matter where you play. But the odds are better in some states than in others.

Nationwide, the lottery pays out $0.67 in prizes per $1 spent, according to lottery statistics gathered by The Motley Fool Ascent. The best state to play is Ohio, where that goes up to $0.76 in prizes per $1 of lottery spending. What about the worst places to play? You’ll find out below, and then we’ll cover a much safer way to build wealth.

The 10 worst states to play the lottery

Here are the worst states to play the lottery and each state’s prizes paid per $1 of lottery spending:

South Dakota: $0.21West Virginia: $0.23Oregon: $0.26Rhode Island: $0.40New Mexico: $0.55North Dakota: $0.56New York: $0.57Wyoming: $0.59Louisiana: $0.60Delaware: $0.61

This is all from the most recently available dataset, which is lottery data in 2021. Most states are toward the middle of the pack, with $0.60 to $0.74 in prizes per $1 of lottery spending — not far from the nationwide average of $0.67. Only nine states are outside this range.

The biggest outliers are South Dakota, West Virginia, and Oregon. Lotto tickets are never a great way to spend your money (unless you luck out and hit the big one of course), but they’re particularly bad deals in those states.

There’s no good place to play

Wherever you live, you’re better off not playing the lottery. Remember that the highest average payout is in Ohio, with $0.76 in prizes per $1 in spending. So on average, people there lose $0.24 for every $1 they spend.

That also underscores the risk. Most people don’t lose a portion of the money they spend on lottery tickets. They lose all of it, and only a few lucky winners come away with anything.

If you enjoy playing the lottery, there’s nothing wrong with buying a ticket here and there. But the odds of winning the Powerball jackpot are 1 in 292 million, so definitely don’t spend much money on it, and don’t go in with expectations of winning big.

A better, more reliable way to build wealth

One of the most important things to understand about improving your finances is that it takes time. You can save money and build wealth if you follow good financial habits. Everyone wants to get rich quickly, but there’s no reliable way to do this.

For anyone who isn’t lucky enough to win the lottery, it’s a longer process. If you’d like to start making financial improvements that will get you on the right track, here are the steps to take:

Always spend less than you earn

It all starts here. It’s impossible to be financially stable if you’re spending more than you earn. Keep your income in mind before taking on new bills, such as a larger car payment or rent. Ideally, try to spend no more than 60% of your income on your monthly bills.

Pay yourself first every month

This is an easy trick to get better at saving money. Instead of waiting, transfer money to your savings account right after you get paid. By saving regularly, you’ll be able to build an emergency fund and savings for anything else you need, such as a vacation or a down payment on a home.

Grow your money by investing

In addition to saving, it’s also important to invest a portion of your money every month — 10% of your income is a good starting point. You can do this automatically through a 401(k) at work, if you have this option. You can also set up your own individual retirement account (IRA) or traditional brokerage account.

Look for ways to boost your income

Managing money gets a lot easier as your income increases. Consider asking for a raise, going job hunting, or launching a side hustle to earn more.

When you follow these habits long enough, you can get incredible results. If you’re able to save $500 per month, that’s $6,000 over a year.

If you’re also able to invest $500 per month, that can help you build substantial retirement savings throughout your career. If you invest that for 40 years at an 8% annual return, a reasonable amount based on the stock market’s average, you’d end up with $1.68 million. It’s not as much as winning the Powerball, but the odds are a whole lot better.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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More than 1 in 3 Americans surveyed say they have trouble paying for prescription medications. These tips can help. [[{“value”:”

According to a GoodRx survey, over one-third of Americans have trouble affording their prescription medications. When people can’t afford their prescriptions, difficult decisions are made, including whether to follow medical advice or take them as directed. If you wonder where you’ll come up with the funds to pay for medications, these tips may help.

1. Check out Mark Cuban’s prescription drug company

Businessman Mark Cuban’s Cost Plus Drug Company is perfectly named. Here’s how it works: Cost Plus purchases the drug from the manufacturer at cost, adds a 15% markup so the company can stay in business, and then adds $5 to pay the pharmacies that prepare and provide the prescriptions. For example:

Cost Plus pays a base price of $20Cost Plus then adds 15% to the base price ($3)Finally, Cost Plus adds $5 to pay the pharmacy that fills your prescription

Final cost: $28

One example of how much a person can save is featured on the Cost Plus site. It’s for the generic version of Prozac, called fluoxetine. Fluoxetine typically costs $22.94, but even after adding 15% and a pharmacy fee of $5, Drug Plus sells it for $6.20.

2. Split pills

We are not suggesting that you take half the recommended dose of any medication. What we’re suggesting is that you speak with your doctor to find out if they will prescribe twice the required dose. For example, if you’re prescribed a 20 mg tablet, ask if the doctor will write the prescription for 40 mg instead. That way, you can cut the tablets in half, continue taking the prescribed dose, and make the prescription last twice as long.

3. Get to know discount programs

Even if you have money in a traditional IRA for retirement and your medical coverage is halfway decent, it’s possible that you don’t always have the funds in your checking account to cover the medication you need. Discount programs are designed to give you a break on the price of medications you use (or should be using), even if your insurance can’t help.

Check out RxAssist for help here. NeedyMeds is another option — both allow you to type in the name of the medication you need. Once you’ve provided that information, both sites will show you where the best prices are to be found, which discount programs are available, and what steps you need to take to land a lower price.

4. Medicare Part D

If you’re 65 or older, consider signing up for Medicare Part D (supplemental drug coverage). You’ll pay a monthly premium to add Medicare Part D to your existing Medicare plan. Still, it could be much less expensive than the out-of-pocket cost of your medication without Part D.

5. Ask about generics

Despite the number of people who seem to believe that brand-name drugs are superior, generics are exactly the same medication. The reason brand-name drugs cost more is two-fold:

The amount of money that went into researching and creating the drug.The fact that drug companies know their formulation is the “only game in town” until a generic is made.

Ask your pharmacist about how much you could save by switching.

6. Find out about switching to another brand

Let’s say you’re on cholesterol medication, but the price is about to wipe your checking account clean. Cholesterol medications have been around for a while now, and there’s likely a generic that would work just as well. However, if there’s no generic available, find out if there’s another less-expensive brand that’s just as good as the medication you’ve been taking. Ask your doctor.

There is currently little we can do to control the high cost of prescription medications. However, we do have some tools at our disposal to help manage those costs.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Some of the financial advice you get might hurt you rather than help you. Read on for three tips you should absolutely ignore. [[{“value”:”

Many of us have received our fair share of financial advice, whether from well-meaning family members, neighbors, or friends. Unfortunately, a good 17% of Americans say they’ve been given poor advice that hurt them financially, according to data from Quicken. Here are three financial tips that could lead you astray.

1. There’s no such thing as too much money in savings

Many people don’t have enough money in savings to cover unplanned expenses. So it’s definitely a good idea to build an emergency fund with enough money to cover three to six months of essential living costs. In some situations, it could even pay to go beyond that point and sock away enough cash in the bank to cover a year’s worth of bills.

But if you’ve been told that it pays to keep putting money into savings even once you’ve reached your emergency fund goal, then sorry, but you’ve been given some bum advice. You may, over time, earn between 1% and 4% a year on your money by keeping it in savings. But the stock market’s annual average return over the past 50 years has been 10%. So once you’re done funding your emergency savings, it really pays to put your extra money into the market.

In fact, say you have $10,000 beyond what you need for emergencies. Keep it in savings over 20 years at an average annual 3% return, and it’ll grow to about $18,000. Put that $10,000 into a stock portfolio generating an average annual 10% return, and it’ll grow to about $67,000.

2. You don’t have to worry about retirement savings until your 40s

You’ll often hear that in your 20s and 30s, you should focus on building an emergency fund, paying off lingering debt, and saving for a home. But there’s another big thing you ought to be saving for: your retirement.

Some people will say there’s no need to rush into retirement savings when you’re first kicking off your career. Some will even say you don’t have to worry about funding an individual retirement account (IRA) or 401(k) until your 40s. But waiting to save for retirement could mean missing out on many years of growth in your IRA or 401(k).

Let’s say you begin contributing $200 a month to an IRA at age 40 and continue to do so through age 65. If your portfolio generates an average annual 10% return, you’ll end up with about $236,000 in retirement savings. But if you start contributing and investing that monthly $200 10 years earlier, you’ll end up with more like $650,000 instead.

Now, it may not be so easy to come up with funds for a retirement account when you’re young and have other expenses. But try to at least contribute something, even if it’s $50 a month to start out with. Also, if you have a 401(k) plan, try to contribute enough money to claim your full employer match. That’ll give you free money to invest.

3. Using credit cards will ruin you financially

You’ll commonly hear that using credit cards will cause you to rack up debt and condemn you to financial ruin. Not so.

Credit card usage can indeed result in debt if you don’t pay off your balances in full every month or don’t make an effort to track your spending on your cards. But if you limit your credit card charges to sums you can repay in full, you won’t rack up interest on them. What you probably will do, though, is earn cash back or rewards on your purchases, which can better your financial situation rather than hurt it.

Sometimes, people with the best of intentions end up dishing out bad advice. But if you’ve been told any of these three things, do yourself a favor and ignore those so-called words of wisdom. They could end up setting you back in a really big way.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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