We’ve all heard the expression: “Don’t spend it all at once.” No doubt we were told this for the first time when we used to get pocket money – and it’s been ingrained in our brains ever since.
But while we might be sensible with our cash now from one payday to another, many people lose all sense of “not spending it all at once” when it comes to types of gaming for real money (or any form of gambling, like sports betting).
When it comes to gaming, you have to understand the risks associated with games – the odds of winning (and, more to the point, losing) and, therefore, how much you should bet on each round or game.
Seasoned gamblers operate what they know as the bankroll management system, and this is something any person should stick to when they are playing games for real money. Following the system, it makes it unlikely they will go bust.
Let’s explain bankroll management in more detail.
What is Your Bankroll?
The first important lesson is that your bankroll is not how much money you have. Your bankroll is how much spare cash you have that you can use for gaming – but only once all your day-to-day living expenses and other life luxuries, plus some spare to put aside for savings, is taken into account.
If, for example, your monthly take-home salary was $3,000, and you had $400 sitting around idle after all other expenses and savings were taken care of, your bankroll for gaming is $400.
This rule cannot be ignored and ensures that your normal life can continue with no real financial hardship if you were to lose your entire bankroll. You have not lost your rent money, cash for food, or the rising cost of gas – just your spare dollars.
How to Work your Bankroll
Now that you have established your gambling bankroll, you must stick to some solid rules about how to play with it. The key thing to keep in mind as we explain this section in more detail is that you should only gamble a small portion of your bankroll at any one time.
Let’s give you a simple example. Let’s say you join an online casino – a typical site will offer low and high-stakes gaming.
With your $400 bankroll available, you sit down at a blackjack table and proceed to bet $100 a hand. This is a HUGE mistake. Losing streaks are extremely common in casinos (yes, you can go on winning streaks, too) – and you can see that in this case, you need only lose four hands of blackjack in a row to go bust. Boom! Your entire bankroll is gone in around five minutes.
That doesn’t sound like much fun, and with no more gambling funds available, you get zero more entertainment. Spending more money is out of the question.
So, what’s the answer? It’s basic bankroll management. The rule of thumb says that you should only wager about 5% of your bankroll at any one time (some professional players go as low as 2%). In this way, you can suck up significant losing streaks.
In our blackjack example, that means playing for no more than $20 a hand.
But for bankroll management to work correctly, you must stick to your 5% rule every time you play. If you have a small winning streak, and your $400 turns into $500, you can now safely bet $25 a hand – that’s 5% of $500.
On the flip side, if you had a poor session and quit with just $250 remaining in your roll, you can only bet 5% each bet the next time you sit down at a table, so $12.50 max.
If you keep adjusting your betting amounts up and down, according to your bankroll size, you will generally remain in the game for a considerable time.
Summary
Solid bankroll management is a slightly more sophisticated version of “don’t spend it all at once.” You would not consider walking into a casino and putting your entire life’s worth on one spin of the roulette wheel (although that’s what one daredevil Brit famously did.) So, this 5% formula is a way of spreading and, in some cases, negating the risk.
However, with all that being said, you must always remember that in casino gaming, no matter which game you play, the house has an edge. While that might seem unfair, the casino does need to make a profit to pay for its staff, property, and bills, so you should consider the house edge a small tax on your entertainment.
Good luck, and play sensibly.