I’m a recovering gambler and just got $35K from workers' comp — how do I make sure I don’t blow it again?

Matt is about to receive $35,000 from a workers’ compensation settlement — a windfall most of us would be pleased about. For Matt, though, the payout feels like a blessing and a curse — and, for him, the stakes couldn’t be higher.

On paper this $35K gives Matt a chance to pay off debt, build savings and set the foundation for retirement. But in reality, the money could slip away almost instantly. Matt’s problem? A long-standing gambling habit that has drained his savings and left him with little to show for it. Now he’s desperate to find ways to avoid the casino and keep this windfall in his pocket.

While Matt's situation may be hypothetical, it has real world resonance. Last June, Mental Health Research Canada (MHRC) released a nationwide survey revealing that 9.1% of Canadians over the age of 16 — about 3.2 million people — were classified as demonstrating problematic gambling, based on the Problem Gambling Severity Index (1).

Matt’s settlement could represent a turning point. Instead of another missed opportunity, it may become the foundation for long-term stability. But to achieve that, he must immediately put some safeguards in place before the temptation to “double it” at a casino becomes too hard to resist. Here are some examples of ways Matt can make the most of his windfall without falling into old habits.

1. Clear existing debts

Debt payoff is typically the best, first move to make when you receive a lump sum of money, especially for someone vulnerable to risky spending, such as Matt. High-interest credit card debt, for example, can carry interest rates above 20%, meaning interest charges can inflate an existing balance quickly if left unpaid. Eliminating these balances first reduces monthly obligations, frees up cash flow and provides an immediate sense of progress.

But what happens after the debt is gone? For those with a gambling issue, leaving the rest in a chequing account could be a recipe for relapse.

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2. Use accounts with withdrawal penalties

Instead, Matt can place some of his windfall in a Registered Retirement Savings Plan (RRSP), which comes with penalties for early withdrawals. While these fees frustrate some investors, they can be a hidden benefit for someone looking to restrict access to their own funds. A 10% to 20% withholding tax for early withdrawal may be a good deterrent to keep the money untouched until retirement (2).

Savings products may also help. For instance Guaranteed Investment Certificates (GICs) lock in money for a specified period of time. Making an early withdrawal means paying a penalty and losing some of the earned interest. Even if the rates on GICs aren’t sky-high, the built-in waiting period can help Matt keep his impulsive spending in check.

3. Consider long-term investments

Once his immediate debts are gone and short-term safeguards are in place, Matt can turn his attention to growth over the long term.

Low-cost target-date retirement funds or index funds tracking the S&P/TSX Composite can provide diversified exposure to the stock market, historically returning about 10% annually over the long term, a favourite investment strategy for the Oracle of Omaha, Warren Buffett. This is a historical average and a nominal return not adjusted for inflation.

Within the Canadian stock market, the S&P/TSX Composite Net Total Index stands at 5.2 times its value compared to the beginning of 2000 — translating to an annualized return of 6.9% over the past 24 years. Additionally, the TSX has returned 9.7% annualized over the past decade, according to Wowa (3).

While market swings are expected, these investments build wealth when left untouched for years or even decades.

The challenge for someone with a gambling addiction, like Matt, is resisting the urge to treat investments like bets. That’s why automation — setting up recurring contributions and minimizing account access — becomes crucial.

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4. Address the gambling problem directly

Even the best financial strategy won’t work unless Matt tackles the root problem. Financial safeguards are most effective when paired with emotional and behavioural change.

One effective tool is self-exclusion, a voluntary program where individuals ban themselves from casinos or online betting platforms. Once enrolled, casinos are legally required to deny entry or services, and winnings may even be forfeited if they try to gamble despite the ban.

In addition, seeking help from organizations such as the Canadian Mental Health Association (CMHA), the Responsible Gambling Council (RGC) or local counselling programs can provide Matt with accountability and community support.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Mental Health Research Canada (1); TurboTax (2); Wowa (3)