By Bill Burton
What is Money Management? – Money management is a generic term that can take on a multitude of meanings for different people. For the average person it might mean making a budget and sticking to it in order to be able to pay your bills and still have money to survive between pay checks.
The term money management takes on a different meaning when it is used by gamblers and even then it has different meanings depending upon which players you are talking with.
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 manage their bankroll.
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 affect on the interest rate you pay? Of course it won’t and doubling your bet twice and then regressing down to a single bet will have no affect on the casinos edge on the game.
The goal of this type of money management is to bet more when you are winning and less when you are losing. This is easier said that done as you never know you are in a winning or losing streak until it ends.
Bankroll Management.- The true essence of money management really comes down to bankroll management. It is how you handle your money in the casino to make sure you have enough to last for your casino visits. 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.
Win Goals and Loss Limits – Since most casino games have a negative expectation, players are advised to set a win goal and stop loss. This ensures than that they will not go broke during any given session and will hopefully not give back all the profits if they do win. Some 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 do recommend players set loss limits and win goals. The win goal is on a sliding scale and increases as the winning continues. This way the player can continue to win without having to stop at 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. Again 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.
Use Common Sense – Good money management starts with good planning. Most of us set up a household budget to manage our daily expenses and we should do the same for our casino “budget. It’s not difficult to do and the rewards are immense.
Before you leave for vacation decide exactly how much money you will spend for gambling. 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.
Divide your bankroll by the number of days you will be at the casino. Put each day’s money in a separate envelope to be used for that day only. At the end of the day put all your winnings or what ever money you have left back in the envelope and seal it. This will be money you take home with you.
Break you casino bankroll down into several playing sessions. Don’t risk it all in one playing session. Take a break between sessions.
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 is what separates 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 THEIR money!
Until Next time remember: Luck comes and goes…..Knowledge Stays Forever.
Bill Burton is the Casino Gambling Guide and columnist for the Internet portal About.com located at: www.casinogambling.about.com He is the author of “1000 Best Casino Gambling Secrets” and "Get the Edge at Low Limit Texas Hold’em" available online at www.billburton.com. He an instructor for Golden Touch Craps: www.thecrapsclub.com