Bankroll Management

Bankroll Management

Whether you're a seasoned gambler or just starting, understanding bankroll management is crucial.

Proper bankroll management is essential for mitigating risk, prolonging your gambling sessions, and avoiding significant financial losses. It helps you maintain discipline and make informed decisions about your gambling activities.

In this lesson we’ll explore what a bankroll is, and how to effectively incorporate it into our gambling behavior.

What Is a Bankroll?

Your bankroll refers to the total amount of money you have set aside specifically for gambling. It serves as your gambling budget and determines the stakes you can comfortably play.

One of the first key questions is how much should your bankroll actually be?  

There are a couple factors to consider, including your financial circumstances, the gambling activities you want to engage in, and your general comfort level.

Start by assessing your financial circumstances, including income, expenses, and discretionary funds available for gambling. Determine an amount that you can afford to allocate to your bankroll without impacting essential expenses. 

The data-backed Lower Risk Gambling Guidelines recommend you allocate no more than 1% of household income towards gambling. If you don’t feel that amount is reasonable for how you want to gamble, we would recommend no more than 10% of your disposable income for a given month.

Accounting For Variance

No matter what your gambling activity, your outcomes will fluctuate from session to session. That means your bankroll needs to be able to withstand the fluctuations, otherwise called variance.

You don’t want to be risking your entire bankroll in any one gambling session.  The goal of the bankroll is to enable you to play a certain number of sessions comfortably, and give you the ability to analyze and improve your play over time.

An easy rule to follow is the "5% rule," which suggests that your individual gambling sessions should not exceed 5% of your total bankroll.  

For example, if you are a poker player and you buy-in for $200 each time you play, we would recommend your bankroll to have at least $4,000 in it.  This would mean that each $200 buy in represents 5% of your overall bankroll.  To deplete your bankroll, you would have to lose 20 consecutive buy-ins. 

Managing Wins and Losses

If you experience a winning streak and accumulate additional funds, consider setting aside a portion of your profits as savings or withdrawing them from your bankroll. Avoid the temptation to immediately play with all your winnings.

A practice that can help make this process systematic is “cashing out” a certain percentage of winnings every time you grow your bankroll to a certain level.  For example, whenever you increase your bankroll by 50%, you withdraw 50% of the winnings to your general funds.  

Example:

Your bankroll starts at $4000.  After 3 months of profitable play, you slowly grow your bankroll to $6000.  Once you hit this milestone, you withdraw $1,000 (50%) of your winnings, and your remaining bankroll is $5000.

When you increase that $5,000 to $7500, you withdraw another $1,250…and so on.

This method ensures that you celebrate your wins, and don’t move your bet size up too quickly.

Accepting Losses

Losses are an inevitable part of gambling. If you encounter a losing streak, resist the urge to chase your losses by increasing your bets or deviating from your bankroll management plan. Instead, stay disciplined and stick to your predetermined limits.  The whole point of having a bankroll is that these losses shouldn’t affect your day to day life, or hinder your ability to pay for necessities.

Dealing With Bankroll Depletion

What do you do if you lose your entire bankroll?

If you deplete your entire bankroll, take a step back and reassess your gambling strategy. Reflect on your gameplay, spending habits, and adjustments that need to be made to your bankroll management approach.

If you find yourself unable to stick to the gambling spending limits you set then take a break from gambling and focus on rebuilding your bankroll. If you're unable to do that, consider seeking help.

Let's Reflect

How do you think better bankroll management could impact your overall gambling experience?

How do you feel when you exceed your bankroll limits, and how do you react to such situations?

Closing Thought

Effective bankroll management is a cornerstone of intentional gambling and can significantly influence your long-term success and enjoyment in the gambling world. 

By understanding the principles of bankroll management and implementing sound strategies, you can enhance your control, minimize risk, and maximize the enjoyment of your gambling experiences.