Financial management is a key part of life in general. Applied to poker, this is known as “Bankroll Management”. Poker players are not known for their application of sound money management theory, they are often dismissed by non poker players as simply gamblers, but many poker players are hiding a hidden skill, which is the ability to pick out games that are both profitable and exposing only a controlled percentage of their overall cash dedicated to their poker playing each time they play poker. Any profitable poker player will tell you that in order to survive the swings and variance associated with longer term winning poker playing; being able to manage your money to stay in the game is of paramount importance, almost as important as being able to beat the game itself.
So what is a bankroll? A bankroll is any amount of money that you set aside that is not used for any other reason other than to play poker. This helps you solve some of the normal assumptions associated with poker player or gamblers in general.
The first assumption of the none player (usually well meaning family or friends) is that you are going to bet with everything you have with no thought to consequence if you lose. This problem is solved when using a bankroll. Why? You are betting with money that is not required for rent, mortgage, food or utility bills meaning that even should the worst happen your important obligations are covered. This helps you relax into playing properly and reducing the effect of the urge to tilt and chases losses. Would you feel the pressure if winning the next pot was the difference between eating that night or not? I would.
The second assumption is that you are instantly going to get addicted to gambling once playing poker, immediately entering self destruct and losing control. This also is solved by utilising a bankroll and managing it correctly. You are by definition in control of the money in your bankroll and making sensible, disciplined decisions which helps you play better poker and be in the correct mindset to win. Staying in control, having restraint, a clear mind and discipline is a fundamental part of winning poker. You should use your bankroll management as your safety cushion. If you feel that you want to chase losses irrationally and stake too much of your bankroll then this is the time to step away from the game and evaluate if you need to take a break. Constantly step back and evaluate if you are making the right decisions with your bankroll. Everyone loses, but the real winners do things right and make correct money decisions no matter what their feelings are towards a loss or bad beat.