Managing Your Money – Money Management
How to make your bankroll last, minimize your losses, and protect your winnings
By Bill Burton
Some players believe that using a certain betting method can change the house advantage of the game and give them an edge. The idea that a betting system can change the house edge is a fallacy.
The term “money management” can take on a multitude of meanings for different people. For example, when I was a kid, my parents wanted to instill the value of money and teach me to be responsible by giving me a weekly allowance. I received my allowance on Friday and I quickly learned that if I spent it all right away, I would have to go a whole week before I could get any more.
Of course, back then, the money spending decisions for an 8 year old kid were fairly simple: do I buy candy bars or comic books? I guess as a youth I had unknown literary aspirations, because I usually chose the comic books—and today, I’m a writer with perfect teeth.
As I grew older, money management meant making a budget to make sure I could pay all my bills between paychecks, and still have enough left at the end of the week for luxury items like food. Whether we call it budgeting or financial planning, it all boils down to how we manage our money.
Different Meanings
The term money management takes on a different meaning when it’s used by gamblers and casino players. Even then it has different meanings, depending on the type of player you are referring to.
for some players, the term money management is used to describe a betting system or a way of placing bets that they hope will somehow give them a way to beat the house. Other players use the term to describe how they allocate their bankroll–the maximum amount you’re willing to lose in a given session, whether you’ll pocket part of your winnings or keep laying it all on the line, and so on.
The House Edge is Constant
Some players believe that using a certain betting method can change the house advantage of the game and give them an edge. The idea that a betting system can change the house edge is a fallacy. Will paying a double mortgage payment one month, and then skipping a payment two months later, have any effect on the interest rate? Of course it won’t, just as doubling your bet twice, and then regressing down to a single bet, will have absolutely no effect on the casino’s edge for that particular contest.
If you’re sticking with any type of betting system, you’re practicing poor money management. Some of these systems tell you to raise your bets when you’re winning, and drop them down when you hit a rough patch. The fundamental problem with this “strategy” is that you never know you’re in a winning or losing streak until it ends.
Bankroll Management
The true essence of money management really comes down to bankroll management. It’s all about how you handle your money in the casino to make sure you have enough to last for the duration of your visit. Remember, money management systems will not change the odds of any game. A good bankroll management system will help you control the amount of money that you put at risk. This will enable you to play longer on your bankroll.
No matter what your game of choice is, you’ll benefit from smart money management. I think this is especially true for slot players, since you’re going to the casino, first and foremost, to be entertained. You want to experience good, long sessions at the games you enjoy. There’s nothing fun about your bankroll getting wiped out in the first 30 minutes.
Win Goals and Loss Limits
Since most casino games have a negative expectation, I advise you to set a win goal and a “stop loss” (the maximum amount you can afford to lose during a session, before it’s time to take a break). This ensures that you won’t go broke during any given session, and if you win some, you won’t give it all back to the casino right away.
Some people argue that the concept of money management is nothing more than smoke and mirrors, because if you play a game with a negative expectation you will lose in the long run. I still recommend players set loss limits and win goals. The win goal should be on a sliding scale, increasing as the winning continues. This way, the player can continue to win without having to stop at a predetermined figure. The stop loss is also on a sliding scale once a player has won. This is to ensure they walk away with some of the money they have won.
You can argue the merits of such a system, but the main reason why I advocate money management is discipline. It takes discipline to be a winner at any casino game. This is especially true in poker, where you have to wait for the right starting hands.
Use Common Sense
Good money management starts with good planning. Many of us establish a household budget to manage our daily expenses. Why not do the same for your casino budget? It’s not difficult to do, and the rewards can be great.
Before you leave for your next gambling trip, decide exactly how much money you will spend at the casino. This is going to be separate from your other spending money. This must be money that you can afford to lose. This is your gambling bankroll, and you will use only this money for playing.
Then, divide your bankroll by the number of days you will be at the casino(s). Put each day’s money in a separate envelope, which is to be used for that day only. At the end of each day, put all of your winnings, or whatever money you have left, back in the envelope—and seal it. You will take this money home with you.
Break your casino bankroll down into several playing sessions; don’t risk it all in one session, and take breaks in between. It’s easy to leave the casino when all your money is gone; it takes discipline to walk away when you are ahead. Discipline and control are what separate the winners from the losers. If you don’t learn how to manage your money, the casino will do it for you—once it becomes theirs.
Until next time, remember: luck comes and goes, but knowledge stays forever.
Bill Burton is the author of 1,000 Best Casino Gambling Secrets and Get the Edge at Low Limit Texas Hold’em, which are available online at www.billburton.com. He’s also an instructor for Golden Touch Craps: www.thecrapsclub.com
Managing Your Money – Money Management.
