Why Bankroll Management is Essential
Bankroll management is not simply setting aside an amount of money that you can afford to gamble, it is the way in which you use that money for individual bets. You should only ever be risking a portion of your overall gambling funds as that way you can be sure of having money left over to play with another time.
It doesn’t matter what the odds are, this should remain true at all times. If you are placing a bet that you have a 50% chance of winning, such as on a coin toss, then you would not want to bet your entire bankroll on it, as you may lose it all. Similarly, if you are betting on something that you have a 95% chance of winning, you still will not want to risk losing everything. If instead of betting everything you bet just 5%, then losing is not the end of the world. By spreading the risk in this way, you reduce the role of luck in gambling and allow probability to play a greater role.
As mentioned, proper bankroll management will enable you to play for longer with less risk, it will help you make better gambling decisions, it will make planning for future gaming sessions easier, and it will even reduce the costs of gambling as you will be making fewer transactions that the bank may charge a fee for.
Bankroll Management Basics
The basics of bankroll management are very simple. The first thing you do is set aside how much money you can afford to gamble. Remember that you should never be betting more than you can afford to lose. Next, you set aside a portion of that money for your next gaming session. Many people agree that 10% is a good amount. This means that if you have a total of $1,000 to gamble with, in one session you should not be playing with more than $100. If you lose that amount then you should end your session and come back another time, when you do you will have $900 left, so you can play with $90. Of course, if you win in a session then your bankroll will be larger the next time you play.
There are also steps you can take when it comes to placing individual bets. As already explained, you would not risk the entire $100 on your first bet, as this could end your gaming session very quickly. The way in which you do this will depend somewhat on the game you are playing. For example, if you are a Blackjack player then you will probably be playing around 30 rounds in an hour. This means that if your bankroll is $100 you should be placing bets of around $3 per hand.
As the game progresses, you may have to adjust your bet. If you find that you are suddenly down to $50, then you should consider halving your bet to $1.50 per hand so that you can keep playing. The reverse is also true, if you grow your bankroll to $150, then you may want to increase your bet to around $5 per hand.
The same is true regardless of what type of game you are playing. If you are spinning a slot machine, then you should be dividing the bankroll by how many spins you want to play in a session, if you are betting on Roulette then you should calculate how many rounds you want to play, and so on. This system will help you minimise your losses and also give you the chance to increase your winnings if you hit a lucky streak.
The number of spins or rounds you want to play will be linked to the variance of the game. For instance, Blackjack is a low variance game as it offers regular winnings but they are not very big while slots tend to be higher variance, with the potential for far bigger wins. As a basic rule, the higher the variance, the more rounds/spins you will want to play. This means that with Blackjack you may be able to start betting $3 per hand but with slots you may want to reduce this to $1 or even $0.50.
It cannot be stressed enough that you should never be playing with money that you can’t afford to lose. Gambling can be hugely entertaining and rewarding, but it isn’t fun if you have lost money you need to pay your bills. If you find yourself in this position then you should seek professional help.
Tips for Bankroll Management
The basics described above are very simple to grasp, but they are not always easy to implement, especially when you are considering gameplay strategy. To help you with this we have put together a number of simple tips that will help you better manage your money.
Accept That There Will Be Loses
It is inevitable that you will lose money when gambling. Every game has a house edge and even if it is as small as 0.5%, it still gives the casino the advantage they need to make money. Of course, there is the chance that you will hit a big win, but you have to be emotionally prepared to accept the losses as well.
Try To Stay Calm
Most players get emotionally involved when they play, which is part of the fun. However, whether you hit a big win or a big loss, it is important to try to stay level headed and to keep to your bankroll management strategy. This means that if you lose, you should not be placing big bets to chase the loss and if you win big, then you should not be placing big bets in celebration.
Think Long Term
It is very rare for a player to hit a big win quickly. However, over time it is possible to build a bankroll. It requires tracking wins and losses over time, but with patience and long term planning, you will find that you can make even a small starting bankroll go a long way.
Set Betting Limits
There are three aspects to this. The first is very simple; you should never exceed your budget. If you have set aside 10% of your total bankroll for a gaming session then make sure you stop if you lose it all.
The second is to set yourself a loss limit for a session. You do not necessarily have to use your entire budget for a session. If you have decided you have $100 to risk, you may choose to stop if you lose 80% of it. This provides an added layer of safety.
Finally, many players have found that setting a win limit is also a good idea. For example, if you start with $100, you may set your win limit at $200 and if you reach it, you stop playing. This is a way to ensure that you don’t turn your wins into losses, and it will help you grow your bankroll.
Keep a Record
If you keep track of all your wins and losses for each session then you will be able to make better gambling decision in the future. For example, you may notice that you tend to lose more in the evenings when you are tired. You can then adjust your habits so that you are playing earlier in the day when you are feeling sharper. It is very easy to keep track of this, you will find all the information you need in your account history.
Withdraw Some Winnings
It can be very tempting to leave all your money in your casino account so that you can play with bigger bets. There is nothing wrong with this. However, it is also a good idea to withdraw a portion of your winnings, ideally a little more than your starting deposit, as this way you will not be at risk of losing money from gambling.
Keep Gambling Fun
Gambling should always be about having fun, whether you are playing blackjack, spinning slots, or placing a bet on sports. If you use the techniques described above then it will go a long way to ensure that you never run into financial difficulties as a result of playing, and this should ensure that it remains an enjoyable hobby at all times.