Money management is an essential skill you should pick up even before you reach adulthood. The process of managing your money involves tracking your expenses, evaluating your taxes, setting your monthly budget, and banking.
In essence, it is a skill that can help you improve your organizational skills and, hopefully, become a responsible adult by planning things in advance and paying bills on time.
However, money management is a multi-purpose skill, and apart from being useful in your everyday routine, it can also be applied to other, more specific aspects of your life. In fact, did you know that it is often used by experienced bettors and professional players?
If you are regular – or would like to become one – and wish to learn how managing money can help you make a profit in the long run, you’ve come to the right place.
In our guide, we will cover how money management works in gambling and why it is one of the most important skills you need to learn if you are serious about betting.
What Is Bankroll Management in Gambling?
Gambling has always been popular in the US. Even though sports fans are the ones who gamble most often, around 50% of all adults in the US have placed a bet at least once in their lifetime. More importantly, with the recent changes to online gambling laws across multiple states, it is projected that even more players will join online sportsbooks.
For that reason, whether you’re a fan of games or betting on sports, it is essential that you learn how money management works before you take a plunge into the world of gambling.
Money management in gambling is referred to as bankroll management. If used properly, it can help you minimize losses and avoid spending more than you can afford. If you are a dedicated gambler, bankroll management will also ensure that you always have money to gamble with.
A common misconception is that bankroll refers to all the money one has at their disposal. However, your bankroll isn’t the money you need for bills or living expenses – it strictly refers to the money you set aside for gambling. Think of it as an additional monthly expense.
Setting Your Bankroll
Once you are familiar with the general concept of what bankroll is and its purpose, it’s time to determine what your bankroll can be.
Generally speaking, bankroll refers to the amount you are prepared to lose. However, that does not mean that you should set your bankroll to the maximum amount you can afford to lose.
How much you should set aside for gambling is something we can’t decide for you. The amount depends on your financial situation and your commitment to gambling. Moreover, it is also affected by your plans. For example, maybe you want to buy yourself something nice that would require setting money aside for a few months.
In other words, you should first analyze your monthly expenses and decide what portion of your budget you can comfortably dedicate to gambling.
Most players organize their bankroll on a monthly basis. However, if you wish to make the most of your bankroll, you can separate it into weekly and daily amounts – or even amounts per session.
Naturally, when you work out the numbers and decide on your bankroll, you should make sure to stick to it. One of the most important reasons for having a dedicated bankroll is preventing gambling harm and ensuring that you aren’t spending more than you can afford.
In other words, if you continuously go over the limit you set, it defeats the purpose of having a bankroll in the first place.
Of course, that does not mean that your bankroll is set in stone forever. You can always adjust it based on your wins or losses, as long as it’s something that you’ve planned in advance and not an impulsive decision due to a bad beat.
Boosting Your Bankroll
Before we show you the benefits of having an organized bankroll, you should know that welcome bonuses are an excellent way to boost your bankroll significantly. Virtually online sportsbook offers welcome bonuses. They are designed for new players, and you can claim them by simply registering at the website.
However, an important thing to know is that nearly every welcome bonus comes with wagering requirements, which is the number of times you need to play through the bonus before you can withdraw your winnings.
For example, if you claim a welcome bonus of $50 with wagering requirements of X35, you will have to bet $1,750 of your own money to clear the requirements and be able to withdraw money from your account.
Simply put, the higher the wagering requirements, the more money you’ll have to invest before you can withdraw it. However, if you plan on gambling long-term, you shouldn’t let these requirements worry you too much.
Additionally, welcome bonuses come with several other requirements too.
In most cases, you will have to bet on specific markets with minimum odds outlined in the terms and conditions, or you’d need to spend money on eligible games previously determined by the operator.
Regardless of that, make sure to thoroughly read the terms and conditions of the bonus you wish to claim. Even though they can greatly improve your starting bankroll, in some cases, they can do more harm than good. So, check the fine print before you commit.
Using Bankroll Management to Your Advantage
Another reason bankroll management is crucial for gambling is that it is the foundation for many betting strategies. For example, progressive betting systems, like the Martingale system, require you to start your bet with a certain % of your bankroll.
The Martingale system is most often used among roulette players when betting on even money bets like Red/Black. The system implies doubling your bet each time you lose. So, if your starting bet is $10 and you lose, your next bet should be $20, then $40, and so on. If you win, you start from scratch by placing another $10 bet.
As you can see, the amount you need to bet escalates quickly. If your bankroll is too low and your initial bet is too high, you will quickly deplete your bankroll before the system can even have a chance to show its effectiveness.
A recommended way to use the Martingale system is to bet 0.5% to 1% of your total bankroll – which you can do only after you have a bankroll in place.
The Martingale system is just one example of how bankroll management can work in your favor. In general, more than a few gambling strategies rely on proper bankroll management, be it for games or sports betting.
Conclusion
As we mentioned earlier, you are going to lose bets. Whether you are a sports bettor, there’s no way around it. However, by knowing how to manage the money you use for gambling, you will be able to minimize your losses and make an overall profit.
Now that you know what it is and how it works, the only thing left to do is set a bankroll and start betting wisely.
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